Service Pro Corp (SPC) determined that its unadjusted net income was $10,000 for the year ended September 30, 2013. For the following transactions and events, show the September 30, 2013, adjusting entries that SPC would make.
a. Prepaid Insurance shows a balance of zero at September 30, but Insurance Expense shows a debit balance of $2,340, representing the cost of a three-year fire insurance policy that was purchased on September 1, 2013.
b. On August 31, 2011, Cash was debited and Service Revenue was credited for $1,500. The $1,500 related to fees for a three-month period beginning September 1, 2013.
c. The company's income tax rate is 20%. An income tax installment of $2,000 was paid for this year on September 1, at which time it was recorded in Prepaid Expenses.