PREPAYMENT OF EXPENSES. JDM, Inc., made the following prepayments for expense items during 19x8:

a) Prepaid building rent for 1 year on April 1. JDM paid $6,300, debiting prepaid rent

‘for the amount paid.

b) Prepaid 6 months’ insurance on October 1 by paying $870. Prepaid insurance was debited.

c) Purchased $3,750 of office supplies, debiting office supplies inventory for the full amount. Office supplies costing $385 remain unused at December 31, 19x8.

d) Paid $2,880 for a 12-month service contract for maintenance on a computer. The contract begins November 1. The full amount of the payment was debited to prepaid maintenance.

REQUIRED:

1. Prepare journal entries to record the prepayments.

2. Prepare adjusting entries for the prepayments at December 31, 19x8.