Instructions For each item, indicate (1) the type of adjustment (prepaid expense, unearned revenue, accrued revenue, or accrued expense) and (2) the status of accounts before adjustment (overstatement or understatement). Prepare adjusting entries from selected account data. E3-7 (LO.2, 3), AP The ledger of Passehl Rental Agency on March 31 of the current year includes the following selected accounts, before adjusting entries have been prepared. Prepaid Insurance Supplies Equipment Accumulated Depreciation-Equipment Debit $ 3.600 Credit 2,800 25.000 $ 8,400 20,000 10,200 Rent Revenue 60,000 Interest Expense -0- Salaries and Wages Expense 14.000 Notes Payable Unearned Rent Revenue An analysis of the accounts shows the following. 1. The equipment depreciates $400 per month. 2. One-third of the unearned rent revenue was earned during the quarter. 3. Interest of $500 should be accrued on the notes payable. 4. Supplies on hand total $750. 5. Insurance expires at the rate of $300 per month. Instructions