Buffalo Tom Cruises Purchased a Five-Year Insurance Policy for Its $\begin{array}{llr} \text { Prepaid Insurance } &9,000\\ \text { Insurance Expense } &&9,000\\\end{array}$

Buffalo Tom Cruises purchased a five-year insurance policy for its ships on April 1, 2018 for $60,000. Assuming that April 1 is the effective date of the policy, the adjusting entry on December 31, 2018 is a.
$\begin{array}{llr} \text { Prepaid Insurance } &9,000\\ \text { Insurance Expense } &&9,000\\\end{array}$


b.
$\begin{array}{llr} \text { Insurance Expense } &9,000\\ \text { Prepaid Insurance } &&9,000\\\end{array}$

c.
$\begin{array}{llr} \text { Insurance Expense } &12,000\\ \text { Prepaid Insurance} &&12,000\\\end{array}$

d.
$\begin{array}{llr} \text { Insurance Expense } &3,000\\ \text {Prepaid Insurance } &&3,000\\ \end{array}$