Instructions Reynolds Computer Service offers data processing services to retail clothing stores. The following data have been collected to aid in the preparation of adjusting entries for Reynolds Computer Service for 2019 a. Computer equipment was purchased from IBM in 2016 at a cost of $560,000. Annual depreciation is $127,500. b. A fire insurance policy for a 2-year period beginning September 1, 2019, was purchased from Good Hands Insurance Company for $12.960 cash. The entire amount of the prepayment was debited to prepaid insurance. (Assume that the beginning balance of prepaid insurance was $0 and that there were no other debits or credits to that account during 2019) c. Reynolds has a contract to perform the payroll accounting for Dayton's Department Stores. At the end of 2019, $5,750 of services have been performed under this contract but are unbilled d. Reynolds rents 10 computer terminals for $66 per month per terminal from Extreme Terminals Inc. At December 31, 2019. Reynolds owes Extreme Terminals for half a month's rent on each terminal. The amount owed is unrecorded. e. Perry's Tax Service prepays rent for time on Reynolds' computer. When payments are received from Perry's Tax Service. Reynolds credits unearned rent revenue. At December 31, 2019, Reynolds has earned $1,900 for computer time used by Perry's Tax Service during December 2019. Required: 1. Prepare adjusting entries for each of the transactions 2. Conceptual Connection: What would be the effect on the balance sheet and the income statement if the accountant failed to make the above adjusting entries? ASSETS 111 Cash CHART OF ACCOUNTS Reynolds Computer Service 121 Accounts Receivable 122 Notes Receivable 123 Supplies 124 Prepaid Insurance 125 Prepaid Rent 126 Inventory 127 Interest Receivable 130 Investment 131 Land 134 Furniture General Ledger 139 Accumulated Depreciation LIABILITIES 211 Accounts Payable 213 Income Taxes Payable REVENUE 411 Sales Revenue 412 Service Revenue 413 Interest Income 414 Rent Revenue EXPENSES 511 Cost of Goods Sold 512 Advertising Expense 513 Supplies Expense 514 Utilities Expense 515 Rent Expense 516 Insurance Expense 521 Wages Expense 531 Interest Expense 532 Depreciation Expense 541 Income Taxes Expense 214 Wages Payable 215 Utilities Payable 216 Insurance Payable 217 Rent Payable 221 Interest Payable 222 Unearned Service Revenue 223 Unearned Rent Revenue 231 Bonds Payable 232 Notes Payable (Long-term) NKSHEET NKSHEET ANKSHEET.AL... EQUITY 311 Common Stock 321 Retained Earnings, 12/31/18 331 Dividends 350 Income Summary 1. Prepare adjusting entries for each of the transactions on December 31 General Journal Instructions 1 2 3 7 9 30 6 11 GENERAL JOURNAL DATE ACCOUNT TITLE Adjusting Entries Check My Work 3 more Check My Work uses remaining POST REF DEBIT CREDIT ASSETS Previous