I'm doing adjusting entries. I was given the list of accounts from the ledger dated 12/31/09.
two entries are as follows.
Prepaid Insurance - $1200
Insurance expense - $455

I'm then told to prepare the adjusting entry using the following info.
"the balance in the prepaid Insurance account represents a one year insurance policy that was purchased on february 1, 2009."

Do i just move 11 months of the prepaid to the expense account , and if so where did the $455 that already in the expense account come from? The above is all the info I was given. I thought that the prepaid would be reduced monthly, and if so, shouldn't the expense account be larger? What am I missing?

Thanks for any help.
Murph