Question 2 (20 marks) The unadjusted trial balance and the adjustment data for McLay Business Agent are shown below along with adjusting entry information. McLay Business Agent Unadjusted Trial Balance December 31 (in millions) Cash........... $ 58,000 Accounts receivable.. 59,000 Prepaid insurance 12,000 Equipment 8,000 Accumulated depreciation-equipment. $2,000 Buildings... 57,500 Accumulated depreciation-buildings.. 17,500 Land.. 55,000 Unearned rent.. 16,000 Long-term notes payable. 50,000 Porter, Capital. 115,600 Tuition fees earned 74,000 Training fees earned Wages expense 23,400 32,000 Utilities expense Property taxes expense Interest expense Totals Additional information items: 8,000 5,000 4,000 $298.500 $298.500 I a. The Prepaid Insurance account consists of a payment for a 1-year policy. An analysis of the insurance invoice indicates that one half of the policy has expired by the end of the December 31 year-end. b. A cash payment for space sublet for 8 months was received on July 1 and was credited to Unearned rent. c. Accrued interest expense on the note payable of $1,000 as of December 31 has been incurred but not paid. Required 1. Record the adjusting entries for McLay Business Agent as of December 31. (6 marks) 2. a. Show the calculation for total assets, total liabilities, and owner's equity without the adjustments (without preparing the balance sheet). b. Show the calculation for total assets, total liabilities, and owner's equity with the adjustments (without preparing the balance sheet). (9 marks) 3. Comparing your two answers of part 2, which one provides the most accurate presentation of the balance sheet and why? Which accounting principle(s) would have been violated if the adjustments had not been made? (5 marks)