Prepayment of Expenses JOM Inc. made the following prepayments for expense items during the year: a. Prepaid building rent for 1 year on April 1 by paying $5,808. Prepaid rent was debited for the amount paid. b. Prepaid 12 months' insurance on October 1 by paying $3,684. Prepaid insurance was debited. c. Purchased $4,950 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 $624 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 Oct. 15 Nov. 1 2. Prepare adjusting entries for the prepayments at December 31. If an amount box does not require an entry, leave it blank 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 Dec. 31 Dec. 31 d. Dec. 31 88 88 88 88 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