On 1 July 2018 Tandem Bicycles Paid $4 800, Representing

On 1 July 2018 Tandem Bicycles paid $4 800, representing a two-year insurance premium. The $4 800 was initially recorded in the Insurance expense account. After adjustment at 31 December 2018, the close of the annual accounting period:

A) Insurance expense in the income statement is $2400 and Prepaid Insurance in the balance sheet is $2400.
B) Insurance expense in the income statement is $3600 and Prepaid Insurance in the balance sheet is $0.
C) Insurance expense in the income statement is $3600 and Prepaid Insurance in the balance sheet is $1200.
D) Insurance expense in the income statement is $1200 and Prepaid Insurance in the balance sheet is $3600.