On July 1, East Lake, Inc, purchased a 2-year insurance policy for $12,600 cash. Prepaid Insurance was debited for the entire amount. On December 31, when the year-end financial statements are prepared, assuming adjusting entries are made annually, the appropriate adjusting journal entry to be made would be to debit Insurance Expense $3,150; credit Prepaid Insurance $3,150. debit Prepaid Insurance $12,600; credit insurance Expense $12,600. debit Prepaid insurance $2,100; credit Insurance Expense $2,100. debit Insurance Expense $9,450; Credit Prepaid Insurance $9,450. Assets Labilities and Shareholders' Equity Habilities Current liabilities $11,850$9.406$11,141 Non-current llabilities Total liablities 24,70812.85820,10210.69617,9156,774