Final answer:The correctadjusting entryfor Smokey Company's insurance policy purchase is to debit Insurance Expense with $816 and credit Prepaid Insurance with $816. This is because the company has consumed six months (July 1 to December 31) of the one-year insurance policy.Explanation:In order to understand the correct adjusting entry for Smokey Company's insurancepolicy purchase,we need to check how much of the insurance policy service has actually been consumed. The total insurance cost is $1,632 for a policy period of one year, starting from July 1. Assuming the financial year closes on December 31, Smokey Company would have used 6 months of the insurance policy by the end of the year.To calculate the cost for the six months, we divide the total cost by 12 (months in a year) and then multiply by 6 (the number of months used). Thus, $1,632 / 12 months * 6 months = $816.Therefore, the correct adjusting entry would be todebit Insurance Expensewith $816, reflecting the cost of insurance that has been consumed. Simultaneously, we shouldcredit Prepaid Insurancewith $816, indicating that this amount is yet to be consumed in the policy's coverage. The correct answer is (d) debit Insurance Expense, $816; credit Prepaid Insurance, $816.Learn more about Adjusting Journal Entry here:brainly.com/question/33045014#SPJ11...

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