On January 1 a company purchased a five-year Insurance policy for $2,075 with coverage starting Immediately. If the purchase was recorded in the expense account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: Debit Insurance Expense. $415: credit Prepayments. $415. Debit Prepayments, $1.660; credit Insurance Expense, $1,660. Debit Prepayments, $2,075: credit Cash, $2.075. Debit Prepayments, $415: credit Insurance Expense, $415. Debit Insurance Expense. $1.660: credit Prepayments, $1.660