Williams Company paid $24,000 for a two-year insurance policy on October 1 and recorded the $24,000 as an increase to Prepaid Insurance and a decrease to Cash. What adjustment should Williams make on December 31, the end of the accounting period (no previous adjustment has been made)?

	BALANCE SHEET						INCOME STATEMENT
	ASSETS	=	LIABILITIES	+	STOCKHOLDER'S EQUITY		REVENUE	EXPENSE
	Prepaid Insurance							Insurance Expense
A)	+3,000				+3,000			-3,000
B)	-12,000				-12,000			+12,000
C)	+21,000				+21,000			-21,000
D)	-3,000				-3,000			+3,000