Problem 2: Adjustments

Select accounts of Burger Express are shown below as of December 31, 2017, before any accounts have been adjusted for the current fiscal year.

	Debit	Credit
Prepaid rent	103,680
Accumulated depreciation - Van		16,500
Accumulated depreciation - Stoves		29,250
Gift certificates unearned revenue		4,680

Your analysis reveals additional information as follows:

• On June 1, 2017, the company prepaid rent of $8,640 per month for a 12-month lease on its building.
• The company bought the van on January 1, 2015 for the cost of $132,000. The van is expected to last eight years. The companys policy is to record depreciation evenly over the assets useful life. No depreciation has been recorded during fiscal year 2017.
• When purchased on January 1, 2014, the stoves had expected lives of 10 years. The companys policy is to record depreciation evenly over the assets useful life. No depreciation has been recorded on the stoves during fiscal 2017.
• The company sells numbered gift certificates in $60 denominations. At year-end there were 30 unredeemed gift certificates.

Prepare journal entries for any required accounting adjustments.