Preparing Accounting Adjustments BensEx, a mailing service, has just completed its first year of operations on December 31. Its account balances before yearend adjustments follow; no adjusting entries have been made to the accounts at any time during the year. Assume all balances are normal. Cash $1,700 Accounts receivable 5,120 Prepaid advertising 1,680 Supplies 6,270 Equipment 42,240 Notes payable 7,500 Accounts payable 2,700 Common stock 9,530 Mailing fees earned 86,000 Wages expense 38,800 Rent expense 6,900 Utilities expense 3,020 An analysis of the firms records reveals the following (business began on January 1). 1. The balance in prepaid advertising represents the amount paid for newspaper advertising for one year. The agreement, which calls for the same amount of space each month, covers the period from February 1 of this first year to January 31 of the following year. BensEx did not advertise during its first month of operations. 2. Equipment, purchased January 1, has an estimated life of eight years. 3. Utilities expense does not include expense for December, estimated at $325. The bill will not arrive until January of the following year. 4. At yearend, employees have earned $2,400 in wages that will not be paid until January. 5. Supplies available at yearend amount to $1,520. 6. At yearend, unpaid interest of $450 has accrued on the notes payable. 7. The firms lease calls for rent of $575 per month payable on the first of each month, plus an amount equal to 0.75% of annual mailing fees earned. The rental percentage is payable within 15 days after the end of the year. Prepare the required adjusting entries using the financial statement effects template. Note: For each account category, indicate the appropriate account name. Enter "N/A" for any account category that is not used for a given transaction. Note: Indicate a decrease in an account category by including a negative sign with the amount. Balance Sheet Income Statement Transaction Cash Asset + Noncash Assets = Liabilities + Contrib. Capital + Earned Capital Revenues Expenses = Net Income 1. Answer 1,700 Answer 0 = Answer 0 Answer 9,530 Answer 0 Answer 0 Answer 0 = Answer 0 Answer Answer Answer Answer Answer Answer Answer 2. Answer 0 Answer 0 = Answer 0 Answer 0 Answer 0 Answer 0 Answer 0 = Answer 0 Answer Answer Prepaid Advertising Answer Answer Answer Answer Answer Advertising Expense 3. Answer 0 Answer 0 = Answer 0 Answer 0 Answer 0 Answer 0 Answer 0 = Answer 0 Answer Answer Accumulated Depreciation Answer Accounts Payable Answer Answer Answer Answer Depreciation Expense 4. Answer 0 Answer 0 = Answer 0 Answer 0 Answer 0 Answer 0 Answer 0 = Answer 0 Answer Answer Answer Answer Answer Answer Answer Utilities Expense 5. Answer 0 Answer 0 = Answer 0 Answer 0 Answer 0 Answer 0 Answer 0 = Answer 0 Answer Answer Answer Wages Payable Answer Answer Answer Answer Wages Expense 6. Answer 0 Answer 0 = Answer 0 Answer 0 Answer 0 Answer 0 Answer 0 = Answer 0 Answer Answer Supplies Answer Interest Payable Answer Answer Answer Answer Supplies Expense 7. Answer 0 Answer 0 = Answer 0 Answer 0 Answer 0 Answer 0 Answer 0 = Answer 0 Answer Answer Answer Answer Answer