RECORD THE ADJUSTING ENTRIES:

1.) The portion of the prepaid insurance balance that is applicable to the administrative and office operations is $721.00

2.) Accrue interest on the $13,280.00, 15%, 60-day note received on June 24 and the $38,000, 8%, 120-day note received on May 31. Use the 360-day "banker's year" to calculate the accrued interest receivable.

3.) Straight-line depreciation of office equipment is $1,830.00 for the quarter. Office equipment is depreciated quarterly, not monthly.