The year-end trial balance for Garnet & Gold Corporation appears as follows:

Garnet & Gold Corporation Trial Balance December 31

	Debit		Credit
Cash	$ 300
Accounts Receivable	500
Prepaid Insurance	60
Supplies	140
Equipment	4,000
Accumulated Depreciation, Equipment			$ 800
Unearned Revenues			300
Common Stock			1,000
Retained Earnings			1,400
Service Revenue			3,000
Salaries and Wages Expense	1,000
Rent Expense	500
	$ 6,500		$ 6,500

If, at year-end, the unexpired insurance were $40, the company should record an adjusting entry that

Group of answer choices

debits Prepaid Insurance for $20 and credits Insurance Expense for $20.

debits Insurance Expense for $40 and credits Prepaid Insurance for $40.

debits Insurance Expense for $20 and credits Prepaid Insurance for $20.

debits Prepaid Insurance for $40 and credits Insurance Expense for $40.

debits Insurance Expense for $20 and credits Cash for $20.

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