Prepayment of Expenses JDM Inc. made the following prepayments for expense items during the year: a. Prepaid building rent for 1 year on April 1 by paying $5,988. Prepaid rent was debited for the amount paid b. Prepaid 12 months' insurance on October 1 by paying $3,924. Prepaid insurance was debited. c. Purchased $5,420 of office supplies on October 15, debiting supplies for the full amount. There were no office supplies on hand as of October 15. Office supplies costing $1,085 remain unused at December 31. d. Paid $540 for a 12-month service contract for repairs and maintenance on a computer. The contract begins November 1. The full amount of the payment was debited to prepaid repairs and maintenance. Required: 1. Prepare journal entries to record the payment of cash for each transaction. If an amount box does not require an entry, leave it blank. Apr. 1 Oct. 1 II II II II Oct. 15 Il Nov. 1 2. Prepare adjusting entries for the prepayments at December 31. If an amount box does not require an entry, leave it blank. a Dec. 31 b. Dec. 31 88 Dec. 31 8 d. Dec. 31 3. Conceptual Connection: For all of the above items, assume that the accountant failed to make the adjusting entries. What would be the effect on net income? by $