X Company prepares annual financial statements. On May 1, 2019, the Company paid $60,000 in advance for a two-year insurance policy. After the adjusting entry on December 31, 2019, what will X Company's 2019 financial statements show?

a. Prepaid Insurance, $0; Insurance expense, $60,000

b. Prepaid Insurance, $20,000; Insurance expense, $40,000

c. Prepaid Insurance, $52,500; Insurance expense, $7,500

d. Prepaid Insurance, $40,000; Insurance expense, $20,000

e. Prepaid Insurance, $7,500; Insurance expense, $52,500

f. Prepaid Insurance, $60,000; Insurance expense, $0