(Solution) - The prepaid insurance account had a balance of 2 750 at -(2025 Original AI-Free Solution)

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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.