What adjusting entry is necessary at December 31, the end of the accounting year? Show how the… 1 answer below »

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One-year insurance policy was purchased on August 1 for USD 2,400, and the

following entry was made at that time:

Prepaid Insurance

2,400  

Cash  

2,400

What adjusting entry is necessary at December 31, the end of the accounting year? Show how the T-accounts for Prepaid Insurance and Insurance Expense would appear after the entries are posted.