On April 1, a $4,800 premium on a one-year insurance policy on equipment was paid and charged to Prepaid Insurance. At the end of the year, the adjusting entry would be:On April 1, a premium payment of $4,800 was made and charged to Prepaid Insurance for an equipment insurance policy that will last for one year. "At the end of the year, the insurance expense would be reported as $3,600, and the prepaid insurance would be $1,200 in the financial statements."

1. debit insurance Expense, $3,600; credit prepaid Insurance $3,600.
2. debit insurance Expense, $1,200; credit prepaid Insurance $1,200.
3. debit insurance Expense, $4,800; credit prepaid Insurance $0.
4. debit insurance Expense, $3,650; credit prepaid Insurance $3,650.