On August 1, 2019, a company purchased a 10-months insurance policy from Slide Company for SAR 45,000. The necessary adjusting entry in December 31, 2019 would be:

1. Insurance expense (Dr.) 22,500 Prepaid insurance (Cr.) 22,500

2. Insurance expense (Cr.) 25,500 Prepaid insurance (Dr.) 25,500

3. Insurance expense (Cr.) 22,500 Prepaid insurance (Dr.) 22,500

4. Insurance expense (Dr.) 25,500 Prepaid insurance (Cr.) 25,500