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Williams Company paid $24,000 for a two-year insurance policy on October 1 and recorded the $24,000 as a debit to Prepaid Insurance and a credit
Williams Company paid $24,000 for a two-year insurance policy on October 1 and recorded the $24,000 as a debit to Prepaid Insurance and a credit to Cash. What adjusting entry should Williams make on December 31, the end of the accounting period (no previous adjustment has been made)?
Select one:
A.
| Prepaid Insurance | 3,000 |
|
|
| Insurance Expense |
| 3,000 |
B.
| Insurance Expense | 12,000 |
|
|
| Prepaid Insurance |
| 12,000 |
C.
| Prepaid Insurance | 21,000 |
|
|
| Insurance Expense |
| 21,000 |
D.
| Insurance Expense | 3,000 |
|
|
| Prepaid Insurance |
| 3,000 |
E. None of the above
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