Principles of Accounting Time left 0:11. On January 1, 2019, A company paid a $2,400 for a one-year insurance policy that will expire next year. If the company prepared the financial statements on December 31, 2019, then the adjusting entry is; O Debit Insurance Expense $200 and Credit Prepaid Insurance $200. O Debit Prepaid Insurance $2,400 and Credit Insurance Expense $2,400. Debit Insurance Expense $2,400 and Credit Prepaid Insurance $2,400. Debit Insurance Expense $800 and Credit Prepaid Insurance $800