Sarah Company's trial balance on December 31 (the end of its annual accounting period), included the following account balances before adjustments: Reviewing the company's recorded transactions and accounting records, you find the following data pertaining to the December 31 adjustments: 1. On July 2 , the company had accepted a $10,000,9-month, 10% (annual rate) note receivable from a customer. The interest is to be collected when the note is collected. 2. On August 2, the company had paid $3,000 for a 2-year insurance policy. 3. The building was acquired 10 years ago and is being depreciated using the straight-line method over a 25-year life. It has an estimated residual value of $8,000. 4. The delivery equipment was purchased on April 2. It is to be depreciated using the straight-line method over a 10-year life, with an estimated residual value of $2,000. 5. On September 1 , the company had received 2 years' rent in advance ($4,320) for a portion of a building it is renting to Victoria Company. 6. On December 1, the company had issued a $7,200, 3-month, 12% (annual rate) note payable to a supplier. The interest is to be paid when the note is paid. 7. On January 2, the company purchased $1,000 of office supplies. A physical count on December 31 revealed that there are $400 of office supplies still on hand. No supplies were on hand at the beginning of the year. Required: CHART OF ACCOUNTS Sarah Company General Ledger ASSETS 111 Cash 121 Accounts Receivable 125 Notes Receivable 127 Interest Receivable 131 Prepaid Insurance 135 Office Supplies 141 Inventory 181 Building 182 Accumulated Depreciation: Building 185 Delivery Equipment 186 Accumulated Depreciation: Delivery Equipment REVENUE 411 Sales Revenue 421 Rent Revenue 431 Interest Revenue EXPENSES 500 Cost of Goods Sold 521 Salaries Expense 561 Depreciation Expense 614 Insurance Expense 615 Office Supplies Expense 711 Interest Expense 799 Miscellaneous Expenses LIABILITIES 211 Accounts Payable 221 Notes Payable 224 Interest Payable 225 Unearned Rent EQUITY 311 Common Stock 331 Retained Earnings Prepare the adjusting entries that are necessary to bring Sarah's accounts up to date on December 31