CHAPTER3 The Jones Company began operations on January 1, 20x. The company owns an office building containing 20 separate offices. Adjusting entries are prepared once a year, on December 31st. Selected information is provided below pertaining to certain accounts at 12/31/x5. 1) A note receiva ble exists,as follows: Dated: Principal: Term of note: Stated interest rate: 11/1/x5 12 8 months 8% A prepaid insurance account consists of two policles. The amounts indicated represent the full premium paid for the entire term of the policy 2) earpolicy_ldated: 5/1/s4Total premium paid: S 11,160 2 year policy: dated:9/1 Total premium paid:$ 6,600 3) The company purchased new heating equlpment, applying the straight-line method of depreclation: Initial purchase price $72,000 Estimated useful life: 10 years Unadlusted balance in accumulated depreclation account at 12/31s $8,160 4) Accounts payable are owed to suppliers of cleanlng materials for the building Materials expense for the year: S 27,350 The Cash $ 1,925 5) Two notes payable exdist at year-end. For notes with terms exceeding one year, interest is payable annually, on the anniversary date of the note (es, the interest for the first year for note payable A is due on 4/1/x5, etc.) For notes with terms less than one year, full interest is paid when the note is due. Note payable A-dated: 4/1/x4 S 32,000 Stated Interest rate: 6% Note Payable B-dated: 8/1/x5 $ 45,000 8 month Term of note: Stated interest rate: 8%