E4-8 On March 31, 2018, Easy Rental Agency Inc.s trial balance included the following selected unadjusted account balances. The companys year end is December 31 and it adjusts its accounts quarterly.

Debit Credit

Prepaid insurance $14,400

Supplies 2,800

Equipment 21,600

Accumulated depreciation equipment $5,400

Unearned revenue 9,600

Loan payable, due 2020 20,000

Rent revenue 30,000

Salaries expense 14,000

An analysis of the accounts shows the following:

1-The equipment, which was purchased on January 1, 2017, is estimated to have a useful life of four years. The company uses straight line depreciation.

2- One third of the unearned revenue related to rent is still unearned at the end of the quarter.

3- The loan payable has an interest rate of 6%. Interest is paid on the first day of each following month and was last paid March 1, 2018.

4- Supplies on hand total $580 at March 31.

5- The one-year insurance policy was purchased for $14,400 on January 1.

6- Income tax is estimated to be $3,200 for the quarter.

Instructions:

(a) Prepare the quarterly adjusting entries required at March 31.