Mason Company bought a one year insurance policy on January 1 for $1.200. If the company prepares adjustments on January 31, the necessary adjustment would: O Increase assets $1.200. O Have no effect on total assets. O Decrease assets and increase stockholders' equity $100. O Decrease assets and stockholders' equity $100. On January 1, Laurel Company prepaid $6,000 rent on a building for twelve months. If the company prepares adjustments on January 31, the necessary adjustment would: Increase Prepaid Rent and decrease Cash $6,000. Have no effect on the balance sheet - Decrease Cash and Retained Earnings 5500. Decrease Prepaid Rent and Retained Earnings $500