Gibson Company paid $12,000 on June 1, 2014 for a two-year insurance policy and mistakenly recorded the entire amount as Insurance Expense. The December 31, 2014 adjusting entry to correct this issue is

A) debit Prepaid Insurance and credit Insurance Expense, $8,500 B) debit Insurance Expense and credit Prepaid Insurance, $3,500 C) debit Prepaid Insurance and credit Insurance Expense, $3,500 D) debit Insurance Expense and credit Prepaid Insurance, $8,500