Master Plumbers Pty Ltd provides the following Trial Balance (Extract) at 30 June 2021.

Disregard GST

Chart of Account Accounts Debit Credit

580 Insurance expense $4,000

124 Prepaid insurance $8,400

Additional information:

The balance of the Prepaid insurance account is the annual (yearly) premium for insurance commencing on 1 January 2021. The insurance premium (policy) is due on 1 January every year. On 1 January 2021, there was an increase in the insurance premium (payment) for this policy.

Required:

What would be the closing entry for insurance expense as at 30 June 2021 in the general ledger?

Group of answer choices

Debit (DR): Profit & Loss account $8,200 and Credit (CR): Insurance expense $8,200.

Debit (DR): Profit & Loss account $4,000 and Credit (CR): Insurance expense $4,000

Debit (DR): Insurance expense $4,000 and Credit (CR): Profit & Loss account $4,000

Debit (DR): Insurance expense $8,200 and Credit (CR): Profit & Loss account $8,200