On October 1,Hurt Enterprises Paid 4 Months' Insurance in Advance $\begin{array}{llc}\text { Prepaid insurunce } & 2,700 & \\\quad \text { Insurance expense } & & 2,700 \\\end{array}$

On October 1,Hurt Enterprises paid 4 months' insurance in advance for $3,600.At the time of the payment,prepaid insurance was increased by $3,600.What adjusting entry is necessary as of December 31?

A) $\begin{array}{llc}\text { Prepaid insurunce } & 2,700 & \\\quad \text { Insurance expense } & & 2,700 \\\end{array}$

B) $\begin{array}{lccc}\text { Insurance expense } & 2,700 & \\\quad\text { Prepaid insurance }&& 2,700\\\end{array}$

C) $\begin{array}{lccc}\text { Prepaid insurance } & 900 & \\\quad \text { Insurance expense } & & 900 \\\end{array}$

D) $\begin{array}{lccc}\text { Insurance expense } & 900 & \\\quad \text { Prepaid insurance } & &900\end{array}$
E) No adjusting entry is necessary