On August 1, Year 1, Lace Company paid $2,400 cash for an insurance policy that would provide protection for a one-year term. Which of the following shows how the required adjustment on December 31, Year 1, will affect Lace Company's ledger accounts? + Liabilities Accounts Payable Stockholders' Equity Common Retained Stock Earnings A. B. Assets Prepaid Cash Insurance (2,400) 2,400 (800) 2,400 (1,000) 7 (800) 2,400 C. D. (1,000) Multiple Choice Option D Option A Option B Option