QS 3-5 (Algo) Prepaid (deferred) expenses adjustments LO P1 For each separate case below, follow the three-step process for adjusting the prepaid asset account at December 31 Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year. b. Prepaid insurance. The Prepaid insurance account has a $7,690 debit balance at the start of the year. A roview of insurance b. Prepaid insurance, The Prepaid insurance account has a $7,69. policios shows $1,760 of insurance has expired by year-end. \begin{tabular}{|l|l|l|} \hline policios shows $1,760 of insurance has expired by year-end & Prepaid Insurance \\ \hline Step 1: Delermine what the current account balance equals. & \\ \hline Step 2: Determine what the current account balance should equal. & \\ \hline Step 3: Record the Decomber 31 adjusting antry to get from step 1 to step 2 & \\ \hline \end{tabular} C. Prepaid Rent. On Soptember 1 of the curront year, the company prepald $45,600 for two years of rent for faclities beling C. Prepaid Rent On Soptember 1 of the curront year, the company prepald $45,600 for two occupled that day. The company debited Prepald Rent and credited Cash for $45,600. \begin{tabular}{|l|l|l|} \hline & \\ \hline Step 1: Deternine what the current account balance equals & & \\ \hline \end{tabular} QS 3-5 (Algo) Prepaid (deferred) expenses adjustments LO P1 For each separate case below, follow the three-step process for adjusting the prepaid asset account at December 31 Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year. b. Prepaid insurance. The Prepaid insurance account has a $7,690 debit balance at the start of the year. A roview of insurance b. Prepaid insurance, The Prepaid insurance account has a $7,69. policios shows $1,760 of insurance has expired by year-end. \begin{tabular}{|l|l|l|} \hline policios shows $1,760 of insurance has expired by year-end & Prepaid Insurance \\ \hline Step 1: Delermine what the current account balance equals. & \\ \hline Step 2: Determine what the current account balance should equal. & \\ \hline Step 3: Record the Decomber 31 adjusting antry to get from step 1 to step 2 & \\ \hline \end{tabular} C. Prepaid Rent. On Soptember 1 of the curront year, the company prepald $45,600 for two years of rent for faclities beling C. Prepaid Rent On Soptember 1 of the curront year, the company prepald $45,600 for two occupled that day. The company debited Prepald Rent and credited Cash for $45,600. \begin{tabular}{|l|l|l|} \hline & \\ \hline Step 1: Deternine what the current account balance equals & & \\ \hline \end{tabular}