Help QS 3-5 Prepaid (deferred) expenses adjustments LO P1 For each separate case below, follow the three-step process for adjusting the prepaid asset account at December 31 Step 1: Determine what the current account balance equals Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2 Assume no other adjusting entries are made during the year e account has a $4,900 debit balance to start the year. A review of that $1,000 of unexpired insurance remains at ye d Ins Prepaid In insurance policies and payments shows The nce e equa Step 3: Record the 31, adjusting entry to get from step 1 to step 2 ces account has a $6,090 debit balance at the start of e has expired by year-end urance policies and payments shows $1,120 of insur Prepaid Insurance