E4-5 Link Back to Chapter 2 (Adjusting Entries). TelSurf accounting records include the following account balances: Prepaid insurance Unearned service revenue. December 31, 20X1 20X2 $1,400 $1,600 4.100 3.700 During 20X2, TelSurf recorded these transactions and adjusting entries:

a. Collected $17,000 cash in advance for service revenue to be earned later.

b. Made the year-end adjustment to record the earning of $17,400 service revenue that had been collected in advance.

c. Paid the annual insurance premium of $4,400.

d. Made the year-end adjustment to record insurance expense for the year. You must com- pute this amount. Required 1. Set up T-accounts for Prepaid Insurance, Insurance Expense. Unearned Service Revenue. and Service Revenue. Insert beginning and ending balances for Prepaid Insurance and Unearned Service Revenue. 2. Journalize entries a-d above, and post to the T-accounts. Explanations are not required. Ensure that the ending balances for Prepaid Insurance and Unearned Service Revenue agree with the December 31, 20X2, balances given here for those accounts. 3. Make the closing entries for the above accounts, as needed. Post to the accounts to bring their balances to zero. You need not post to the Income Summary account.