The ledger of Sagovic Rental Agency on March 31 of the current year includes the selected accounts on page 206 before adjusting entries have been prepared. Debits Credits. Prepaid Insurance ($3600), Supplies ($3000), Equipment ($25,000), Accumulated Depreciation-Equipment (Credit: $8,400), Notes Payable (Credit: $20,000), Unearned Rent Revenue (Credit: $12,400), Rent Revenue (Credit: $60,000), Interest Expense $0, Salaries and Wages Expense ($14,000).
An analysis of the accounts shows the following.
1. The equipment depreciates $280 per month.
2. Half of the unearned rent revenue was earned during the quarter.
3. Interest of $400 is accrued on the notes payable.
4. Supplies on hand total $850.
5. Insurance expires at the rate of $400 per month.
Prepare the adjusting entries on March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense.