Smokey Company purchases a one-year insurance policy on July 1 for $3,600. The adjusting entry on December 31 is a. debit Insurance Expense, $1,500; credit Prepaid Insurance, $1,500 Ob. debit Insurance Expense, $2,100; credit Prepaid Insurance, $2,100 c. debit Prepaid Insurance, $1,800; credit Cash, $1,800 Od. debit Insurance Expense, $1,800; credit Prepaid Insurance, $1,800