The $4,500 balance in Prepaid Insurance represents the premium paid in advance for a three-month liability insurance policy. Assuming that 2 months of premium has now expired, the adjustment would be recorded in the work sheet as a:

Select one:

a. debit to Prepaid Insurance, $4,500

b. credit to Prepaid Insurance, $1,500

c. debit to Insurance Expense, $4,500

d. debit to Insurance Expense, $3,000