Engagement Activity - Chapter 3 For each of the following separate cases, prepare the adjusting entries required for financial statements for the year ended (date of) December 31 . 1) The Prepaid Insurance account had a $6,500 balance at the beginning of the year. An analysis of insurance policies shows that $1,800 of unexpired insurance benefits remain on December 31 . 2) Molly Mocha employs one college student every summer in her coffee shop. The student works the five weekdays and is paid on the following Monday. The student works the last week of July, which is Monday, July 29 , through Friday, August 2 . If the student earns $200 per day, what adjusting entry must the coffee shon make on Julv 31 to correctly record accrued salaries expense for July