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 $5,400 debit balance to start the year. A review of insurance policies shows that $1,250 of unexpired insurance remains at year-end. Prepaid insurance 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. b. Prepaid Insurance. The Prepaid Insurance account has a $6,590 debit balance at the start of the year. A review of insurance policies shows $1,320 of insurance has expired by year-end. Prepaid insurance 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. c. Prepaid Rent. On September 1 of the current year, the company prepaid $32,400 for two years of rent for facilities being occupied that day. The company debited Prepaid Rent and credited Cash for $32,400. Prepaid rent 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