Problem:
Lakeland Motor Homes is owned by Joey and Janice Ramone. At the beginning of the year Lakeland purchased a one year insurance policy for $2,400 covering their showroom and surrounding facilities. Lakeland adjusts the insurance each month for the amount of the policy that's expired each month.
Required:
Question: Which of the following items would be a part of the adjusting entry at the end of every month?
A. $2,400 credit to Expired Insurance
B. $2,400 debit to Prepaid Insurance
C. $200 debit to Insurance Expense
D. $200 credit to Cash
Note: Please show the work not just the answer.