Question: The prepaid insurance account had a balance of $2,750 at the beginning of the year. The account was increased for $1,500 for premiums on policies purchased during the year. What is the adjustment required at the end of the year for each of the following independent situations:
(a) the amount of unexpired insurance applicable to future periods is $3,000?
(b) the amount of insurance expired during the year is $1,050?
For (a) and (b), indicate each account affected, whether the account is increased or decreased, and the amount of the increase or decrease.