Which of the following represents the correct adjusting entry for the insurance policy purchased by Upholstery Masters on September 1, 20X1, for $3,240?
A)Debit Insurance Expense $3,240, Credit Prepaid Insurance $3,240
B)Debit Prepaid Insurance $3,240, Credit Insurance Expense $3,240
C)Debit Insurance Expense $1,080, Credit Prepaid Insurance $1,080
D)Debit Prepaid Insurance $1,080, Credit Insurance Expense $1,080