M4-7 Preparing Journal Entries for Deferral and Accrual Adjustments Service Pro Corp (SPC) determined that its unadjusted net income was $10,000 for the year ended September 30 . For the following transactions and events, show the adjusting entries that SPC would make on September 30 . a. At September 30, Prepaid Insurance shows a balance of zero, but Insurance Expense shows a debit balance of $2,340, representing the cost of a threeyear fire insurance policy that was purchased on September 1 of the current year. b. On August of this year, Cash was debited and Service Revenue was credited for $1,500. The $1,500 related to fees for a three-month period starting September 1 of the current year. c. The company's income tax rate is 20 percent. An income tax instalment of $2,000 was paid for this year on September 1 , at which time it was recorded in Prepaid Expenses