Question 3 (18 marks) Bobby Burns, the owner of Bobby's Construction Services, is preparing his adjusting journal entries for the December 31, 2020 year end for his first year of business. The unadjusted year end trial balance shows the following information: Bobby's Construction Services Information from Dec. 31, 2020 Unadjusted Trial Balance CREDIT ACCOUNT Office Supplies Prepaid Insurance Unearned Revenue DEBIT $5,000 $3,000 $8,000 REQUIRED: a) Using the information provided above, record adjusting journal entries relating to each of the items described below. Show any calculations in the explanation line below each adjusting journal entry (16 marks) 1. The Prepaid Insurance balance of $3,000 reflects the amount paid for a two year insurance policy that was purchased on June 1, 2020. 2. Depreciation of equipment is recorded using the straight-line method. The equipment was purchased on January 1, 2020 for $100,000. Bobby expects this equipment to have a useful life of 5 years and a salvage (residual) value of $10,000. 3. The office supplies balance of $5,000 reflects the purchases of supplies over the past year. When the office supplies were counted at the end of the year, it was found that there was only $1,200 of supplies on hand. 4. Services performed during December but not yet billed to customers totalled $4,500 5. On November 1, 2020, a local land developer paid $8,000 cash in advance for work to be done in the future by Bobby's Construction Services. At year end, 50% of the work had not yet been completed. 6. Bobby's Construction Services has a loan with Royal Bank and owes $500 of interest at year end. Payment will be made on January 3, 2021. b) For item 6 above, give the journal entry on January 3, 2021 to record the payment of interest to the bank. (2 marks) Record your answers in the journal entry form on the next page