On January 1 a company purchased a five-year insurance policy for $2.025 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: Multiple Choice Debit insurance Expense, $1,620; credit Prepayments, $1,620. Debit Prepayments, \$2.025, credit Cash, \$2,025. Debit Insurance Expense, \$405, credit Prepayments, $405 Debit Prepayments, $1,620, creait insurance Expense, $1,620 Debit Prepayments, $405, credit insurance Expense, $405