Exercise 350 (Algorithmic) Prepayment of Expenses JOM Inc. made the following prepayments for expense terms during 2019 Prepaid building rene for 1 year on April by paying $7,452. Prepaid fent was debited for the amount paid. b. Prepaid 12 months insurance on October 1 by paying $4,632. Prepaid insurance was debited. c. Purchased 55,680 of office supplies on October 15, debiting supplies for the full amount. There were no office supplies on hand as of October 15. office supplies conting $1,085 remain unused at December 31, 2019, d. Pald $660 for a 12-month service contract for repairs and maintenance on a computer. The contract begins November 1. The full amount of the payment was debited to prepaid repairs and maintenance Required: 1. Prepare journal entries to record the payment of cash for each transaction April 1 (Record prepayment for rent) Oct 1 (record the prepayment of insurance) Oct 15 0 od of upcies) Oct. 15 (Record the purchase of supplies) Nov. 1 o (Record prepayment of repairs and maintenance) 2. Prepare adjusting entries for the prepayments at December 31, 2019. a. Dec. 31 (Record use of prepaid rent) b. Dec. 31 (Record use of prepaid insurance) C. Dec. 31 (Record use of prepaid rent) 2. Dec. 31 o (Record use of prepaid insurance) Dec, 31 (Record use of supplies) Dec. 31 (Record use of prepaid maintenance) 3. Conceptual Connection For all of the above items, assume that the accountant failed to make the adjusting entries. What would be the effect on net income? ty