Selected account balances from the December 31, 2015, Gracy Company trial balance are listed below:

	Debit	Credit
Inventory, January 1, 2015	$12,500
shopping	25,000
salary expenses	5,000
Rental costs	3,250
General and adminsitrative expenses	2,500
Sales		$61,000
Distributed Dividends	3500

In addition, the following information is available:

·	The value of the inventory as of December 31, 2015 is $7,500.
·	$890 of salaries have been accrued as of December 31.
·	On March 30, Gracy purchased a 12-month insurance policy for $240. The purchase was debited to Prepaid Insurance.
·	On December 1, the company paid 2 months' rent in advance. Payment of $1500 was charged to Rental Expenses.
·	In December, a customer paid $1,000 in advance for merchandise that Gracy will ship in 2016. The amount received was credited to Sales.
·	Gracy estimates that her bad debts represent 1% of sales (after all adjustments).
·	The income tax rate is 30%.

Using a general journal format, prepare the required adjusting entries.