For each separate case below, follow the three-step process for adjusting the prepaid asset account at Dec. 31.

Step 1: Determine what the current account balance equls

Step 2: Determine what the current account balance should equl

Step 3: Record the Dec. 31 adjusting entry to get from step 1 to step 2'

b. Prepaid Insurance. The prepaid Insurance account has a 6890 debit balance at the start of the year. A review of insurance policies shows 144- of insurance has expired by year-end. (information for c is in picture)

DR OF CR? Debit Prepaid Insurance 6,890 Step 1: Determine what the current account balance equals. $ 6,890 Step 2: Determine what the current account balance should equal. $ 5,450 Debit 5,450 Credit Step 3: Record the December 31, adjusting entry to get from step 1 to step 2 Adjusting Entry Debit Insurance expense 5,450 Prepaid insurance 5,450 X c. Prepaid Rent. On September 1 of the current year, the company prepaid $36,000 for two years of rent for facilities being occupied that day. The company debited Prepaid Rent and credited Cash for $36,000. Prepaid Rent DR or CR? Debit Step 1: Determine what the current account balance equals. $36,000 36,000 Step 2: Determine what the current account balance should equal. $ 0X Credit Step 3: Record the December 31, adjusting entry to get from step 1 to step 2. Rent expense Prepaid rent