Exercise 3-15 Cullumber Quest Games Co. adjusts its accounts annually. The following information is available for the year ended December 31, 2020. 1. 2. 3. Purchased a 1-year insurance policy on June 1 for $1,980 cash. Paid $6,000 on August 31 for 5 months' rent in advance. On September 4, received $3,240 cash in advance from a company to sponsor a game each month for a total of 9 months for the most improved students at a local school. Signed a contract for cleaning services starting December 1 for $1,200 per month. Paid for the first 2 months on November 30. (Hint: Use the account Prepaid Cleaning to record prepayments.) On December 5, received $1,700 in advance from a gaming club. Determined that on December 31, $440 of these games had not yet been played. 4. 5. For each of the above transactions, prepare the journal entry to record the initial transaction. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Times Debit Credit June 1 Aug. 31 Sept. 4 Nov. 30 Dec. 5 For each of the above transactions, prepare the adjusting journal entry that is required on December 31, (Hint: Use the account Service Revenue for item 3 and Repairs and Maintenance Expense for item 4.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 (To record insurance used) Dec. 31 (To record rent used) Dec. 31 (To record revenue used) Dec. 31 (To record maintenance) Dec. 31 (To record monthly revenue) Post the journal entries in parts (a) and (b) to T-accounts and determine the final balance in each account balance. (Note: Posting to the Cash account is not required.) Prepaid Insurance Prepaid Rent Unearned Service Revenue V Prepaid Cleaning Insurance Expense Rent Expense Service Revenue Maintenance and Repairs Expense Service Revenue