Kuepper's Day Care is a large day-care center in South Orange, New Jersey. The day-care center serves several nearby businesses, as well as a number of individual families. The businesses pay $6,180 per child per year for day-care services for their employees' children. The businesses pay in advance on a quarterly basis. For individual families, day-care services are provided monthly and billed at the beginning of the next month. The following transactions describe Kuepper's activities during December 2009:

a. Day-care service in the amount of $12,450 was provided to individual families during December 2009. These families will not be billed until January 2010.

b. At December 1, 2009, the balance in unearned revenue was $43,775. At December 31, 2009, Kuepper determined that $3,090 of this revenue was still unearned.

c. On December 31, the day-care center collected $131,325 from businesses for services to be provided in 2010.

d. On December 31, 2009, the center recorded depreciation of $2,675 on a bus that it uses for field trips.

e. The day-care center had prepaid insurance at December 1, 2009, of $4,200. An examination of the insurance policies indicates that prepaid insurance at December 31, 2009, is $2,200.

f. On December 1, Kuepper borrowed $60,000 by issuing a five-year, $60,000, 9 percent note payable.

g. Interest on the $60,000 note payable is unpaid and unrecorded at December 31.

h. Salaries of $25,320 are owed but unpaid on December 31.

i. The inventory of disposable diapers, on December 1 is $4,400. At December 31, the cost of diapers in inventory is $890.

Required:

1. Identify whether each entry is an adjusting entry or a regular journal entry. If the entry is an adjusting entry, identify it as an accrued revenue, accrued expense, deferred revenue, or deferred expense.

2. Prepare the entries necessary to record the above transactions.