On 1 April Year 1, a company paid £2,800 in advance for 1 year’s fire insurance. On the financial statement date of 31 December, what is the correct accounting treatment for this information?

(a) Insurance expense of £700: current liability of £2,100

(b) Insurance expense of £2,100: current asset of £700

(c) Insurance expense of £2,100: current liability of £700

(d) Insurance expense of £1,400: current asset of £1,400