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What the adjusting entry at the end of the first year

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Question - On 1 January a company purchased a five-year insurance policy for RM1,800 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, what the adjusting entry at the end of the first year?

a. Debit Prepaid Insurance, RM1,800; credit Cash, RM1,800.

b. Debit Prepaid Insurance, RM360; credit Insurance Expense, RM360.

c. Debit Insurance Expense, RM360; credit Prepaid Insurance, RM1,440.

d. Debit Insurance Expense, RM360; credit Prepaid Insurance, RM360.

e. Debit Prepaid Insurance, RM1,440; credit Insurance Expense, RM1,440.

Reference no: EM132944097

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