Mountaineer Excavation operates in a low-lying area subject to heavy rains and flooding. Because of this, Mountaineer purchases one year of flood insurance in advance on March 1, paying $36,000 ( $3,000 per month). The balance of Prepaid insurance at the beginning of the year is $0. Determine the accounts to be adjusted on December 31, the amount of the adjustment, and the ending balances. Assume no adjustments were previously made during the year. Note: Amounts to be deducted should be indicated with a minus sign