Can someone help me with this question, please? I'm having trouble understanding where the 10,000 balance retained earnings came from and where the 6,000 expense and 6000 for prepaid insurance? Why are we credited retained earnings by 10,000?

Show your work and thanks in advance!

PROBLEM 22-7: Near the end of January 2018, you have been assigned to examine the financial statements of Zarle Company for the year ended December 31, 2017. Assume the trial balance has been prepared but the books have not been closed for 2017. Assuming all amounts are material, prepare journal entries showing the adjustments that are required for each of the fact patterns given below. (Ignore income tax considerations.) 9 A $12,000 insurance premium paid on July 1, 2016, for a policy that expires on June 30, 2019, was charged to insurance expense. Insurance Expense Prepaid Insurance Retained Earnings (1/1/2017) 4,000 6,000 Insurance Expense ($12,000 = 3) 10,000