On July 1, Mesa Verde, Inc. purchased a 6-month insurance policy for $12,600. Prepaid Insurance was debited for the entire amount. The adjusting entries to recognize the expired cost were made each month. On December 31, when the annual financial statements are prepared, the appropriate adjusting journal entry would be ______.

a) Prepaid Insurance $10,500; 

       Insurance Expense $10,500 

b) Insurance Expense$10,500; 

             Prepaid Insurance $10,500 

c) Insurance Expense $2,100; 

              Prepaid Insurance $2,100 

d) Prepaid Insurance $2,100; 

           Insurance Expense $2,100

Answer rating: 100% (QA)

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