96 5 The ledger of Laurie Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared. Debit Credit Prepaid Insurance $5,400 Supplies 4,500 Equipment 40,000 Accumulated Depreciation-Equipment $ 12,600 Notes Payable 25,000 Unearned Rent Revenue 11,100 Rent Revenue 90,000 Interest Expense -0- Salaries and Wages Expense 20,000 The ledger of Laurie Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared. LL F Prepaid Insurance. Supplies Equipment Accumulated Depreciation-Equipment Notes Payable Unearned Rent Revenue Rent Revenue Debit Credit $ 5,400 4,500 40,000 $ 12,600 25,000 11,100 90,000 -0- 20,000 Interest Expense Salaries and Wages Expense An analysis of the accounts shows the following. 1. The equipment depreciates $600 per month. Dr Depreciation expense / Cr Accumulated Depreciation-Equipment: 1,800 2. Two-thirds of the unearned rent revenue was earned during the quarter. Dr unearned rent revenue / Cr Revenue: 11,100 x 2/3 3. The note payable is dated January 1 and bears 12% interest. Dr Interest expense/ Cr Interest payable: 25,000 x 12% x 3/12 4. Supplies on hand total $800. Dr Supplies expense / Cr Supplies: 4,500-800 3,700 5. The insurance policy is a two-year policy dated January 1.. Dr Insurance expense / Cr Prepaid Insurance: 5,400 x 3/24 Instructions: then bios A. Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense. B. Compute the ending balances for Prepaid Insurance, Unearned Rent Revenue, and Rent Revenue, and indicate in which financial statement those items will be reported.