Husker Du Supplies Inc. purchased a 12-month insurance policy on March 1, 2018 for $1,800. At March 31, 2018, the adjusting journal entry to record expiration of this asset will include a

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The insurance policy was purchased for 12 months, which means that one month's worth of insurance expense is $150 ($1,800/12). At the end of the first month, $150 of the prepaid insurance has expired and needs to be recognized as an expense. Therefore, the adjusting journal entry will be a debit to Insurance Expense and a credit to Prepaid Insurance for $150.