• On June 1, 20X0, your company takes out a 1-year insurance policy for $3,600 and prepays the entire amount, recording the amount as an asset. At year-end 20X0, you discover an adjusting entry that records one year’s insurance expense of $1,800.
  1. What is the correcting journal entry?

2. If no correcting journal entry is recorded, how are the 20X0 income statement and balance sheet, respectively, affected?