2 1 points eBook For each separate case below, follow the three-step process for adjusting the prepaid asset account at December 31. Step 1: Determine what the current account balance equals Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2 Assume no other adjusting entries are made during the year. a. Prepaid Insurance. The Prepaid Insurance account has a $4,700 debit balance to start the year. A review of insurance policies shows that $900 of unexpired insurance remains at year-end. Hint 10 10 Print Step 1: Determine what the current account balance equals Step 2: Determine what the current account balance should equal Debit Debit References Step 3: Record the December 31 adjusting entry to get from step 1 to step 2 Insurance expense Prepaid insurance Prepaid Insurance b. Prepaid Insurance. The Prepaid Insurance account has a $5,890 debit balance at the start of the year. A review of insurance policies shows $1,040 of insurance has expired by year-end. Step 1: Determine what the current account balance equals Step 2. Determine what the current account balance should equal Step 3 Record the December 31 adjusting entry to get from step 1 to step 2 Insurance expense Prepaid insurance Debit Debit Prepaid Insurance 0