X Company prepares annual financial statements. On September 1, 2014, X Company paid $63,000 in advance for a two-year insurance policy. After the adjusting entry on December 31, 2014, what will the 2014 financial statements show?
Choose from an answer below:
A. Prepaid Insurance, $15,750; Insurance expense, $47,250
B. Prepaid Insurance, $47,250; Insurance expense, $15,750
C. Prepaid Insurance, $0; Insurance expense, $63,000
D. Prepaid Insurance, $10,500; Insurance expense, $52,500
E. Prepaid Insurance, $52,500; Insurance expense, $10,500
F. Prepaid Insurance, $63,000; Insurance expense, $0