At year end, the following items have not yet been recorded.

a. Insurance expired during the year, $2,000.

b. Estimated bad debts, 1% of gross sales.

c. Depreciation on furniture and equipment, 10% per year.

d. Interest at 6% is receivable on the note for one full year.

e. Rent paid in advance at December 31, $5,400 (originally charged to expense).

f. Accrued salaries at December 31, $5,800.

Required:

(a) Prepare the necessary adjusting entries.

(b) Prepare the necessary closing entries.