PROBLE MS Problem 3-1A Preparing adjusting entries-prepaid expenses Lo accounts on its December 31, 2014, unadjusted trial balance: Window Washing Services prepares adjustments monthly and shows the following selected Account Debit Credit Prepaid insurance. 3,600 Prepaid office rent21,000 Prepaid subscriptios1,260 Prepaid equipment rental 25,200 Required Prepare the required monthly adjusting entries at December 31, 2014, based on the following additional information: The remaining balance in Prepaid Insurance was for a six-month insurance policy purchased for a. $7,200 and in effect on September 1, 2014. b. $4,800 of the balance in Prepaid Office Rent had not been used as at December 31, 2014 c. $1,100 of the balance in Prepaid Subscriptions had been used as at December 31, 2014 d. The company paid $32,400 on April 1, 2014, to rent equipment for a three-year period beginning April 1, 2014 Analysis Component: If the above adjustments were not recorded, identify the types of accounts that would be affected and if they would be over- or understated