Instructions

a$.$ Prepaid building rent for $1$ year on April $1$ by paying $$6,600.$ Prepaid rent was debited for the amount paid.

b$.$ Prepaid $12$ months' insurance on October $1$ by paying $$4,320.$ Prepaid insurance was debited.

c$.$ Purchased $$5,490$ of office supplies on October $15,$ debiting supplies for the full amount. There were no office supplies on hand as of $15.$ Office supplies costing $$1,170$ remain unused at December $31.$

d$.$ Paid $$720$ 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:

Prepare journal entries to record the payment of cash for each transaction.

Prepare adjusting entries for the prepaytients at December $31.$

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?