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. a. Prepald Insurance. The Prepaid Insurance account has a SE.100 debit balance to start the year. A review of Insurance policies shows that $1,600 of unexpired Insurance remains at year-end. Prepaid Insurance 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. b. Prepaid Insurance. The Prepaid Insurance account has a $7,290 debit balance at the start of the year. A review of Insurance policies shows $ 1,600 of Insurance has expired by year-en Prepaid Insurance 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. c. Prepald Rent. On September 1 of the current year, the company prepaid $40,800 for two years of rent for facilities being occupled that day. The company debited Prepaid Rent and credited Cash for $40,800. Prepaid Rent Step 1 0 balance equals. dance should equal. y lo get from step 1 to step 2