The Outward Bounds Tour Operating Company Made an Annual Insurance

The Outward Bounds Tour Operating company made an annual insurance premium payment of
$2,400 on 1^st November 2009. It recorded this payment by debiting its insurance expense
Account $2,400 and crediting its cash account $2,400. The insurance adjusting entry that will
Need to be made at its financial year end of 31 December 2009 is:

A) Debit Insurance Expense $400; Credit Insurance Prepaid $400
B) Debit Insurance Prepaid $2,000; Credit Insurance Expense $2,000
C) Debit Insurance Expense $2,000; Credit Insurance Prepaid $2,000
D) Debit Insurance Prepaid $400; Credit Insurance Prepaid $400
E) None of the above