On January 1, a company purchased a five-year insurance policy for $5,400 with coverage starting immediately. The adjusting entry at the end of the first year is: Select one: a Debit insurance Expense, $1,080, credit Prepayments, $1,000. O b. Debit Prepayments, $4,320; credit Insurance Expense, $4,320, c. Debit Insurance Expense, 84,320; credit Prepayments, 84,320. d. Debit Prepayments, $1,080, credit Insurance Expense, 1,080