Preparing Accounting Adjustments BensEx, a mailing service, has just completed its first year of operations on December 31. Its account balances before year-end 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 3,020 Utilities expense An analysis of the firm's 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 year-end, employees have earned $2,400 in wages that will not be paid until January. 5. Supplies available at year-end amount to $1,520. 6. At year-end, unpaid interest of $450 has accrued on the notes payable. 7. The firm's lease calls for rent of $575 per month payable on the first of each month, plus an amount equal to 0.7 of annual mailing fees earned. The rental percentage is payable within 15 days after the end of the year.