On July $1$ of the current calendar year, Plum Co$.$ paid $$9,500$ cash for management services to be performed over a two$-$year period beginning July $1.$ Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December $31$ of the current year for Plum would include:

Multiple Choice

A debit to a prepaid expense and a credit to Cash for $$7,125.$

A debit to an expense and a credit to a prepaid expense for $$7,125.$

A debit to an expense and a credit to a prepaid expense for $$2,375.$

A debit to a prepaid expense and a credit to an expense for $$2,375.$

A credit to a liability and a debit to a prepaid expense for $$2,375.$