Clint Stillmore operates a private investigating agency called Stillmore Investigations. Some clients pay in advance for services; others, are billed after services have been performed. Advance payments are credited to an account entitled Unearned Retainer Fees. Adjusting entries are per formed on a monthly basis. An unadjusted trial balance dated December 31, 2007, follows. (Bear in mind that adjusting entries have already been made for the first 11 months of 2007, but not for December.) Other Data 1. Accrued but unrecorded client fees earned at December 31 amount to $1,500. 2. Records show that $2,500 of cash receipts originally recorded as Unearned Retainer Fees had been earned as of December 31. 3. Office supplies on hand at December 31 amount to $110. 4. The company purchased all of its office equipment when it first began business. At that time, the equipment's estimated useful life was six years (or 72 months). 5. On October 1, 2007, the company renewed its rental agreement paying $1,800 cash for six months' rent in advance. 6. On March 1 of the current year, the company paid $1,080 cash to renew its 12-month insur- ance policy. 7. Accrued but unrecorded salaries at December 31 amount to $1,900. 8. On June 1, 2007, the company borrowed money from the bank by signing a $9,000, 8 percent, 12-month note payable. The entire note, plus 12 months' accrued interest, is due on May 31, 2008. 9. The company's CPA estimates that income taxes expense for the entire year is $7,500. . Cash.... Accounts receivable. Office supplies STILLMORE INVESTIGATIONS Unadjusted Trial Balance December 31, 2007 $ 40,585 2,000 205 Income taxes payable.. Unexpired insurance... Prepaid rent Office equipment.... Accumulated depreciation: office equipment Accounts payable... Interest payable 1,200 270 54,000 $ 35,250 1,400 360 Note payable..... Unearned retainer fees. Capital stock...... 1,750 9,000 3,500 Retained earnings 30,000 Dividends.... 8,000 Client fees earned... 1,000 Office supplies expense... 60,000 Rent expense. Depreciation expense: office equipment. 605 8,250 Insurance expense.. 5,775 Salaries expense 1,010 Interest ense.. Income taxes expense Totals....... 27,100 360 6,900 $149,260 $149.26