7. The accountant for the Waqar Enterprises obtained the following data as she was preparing adjusting entries for the firms fiscal year ending June 30, 1997:

1. On July 1, 1996, the balance in the firms prepaid insurance account was Rs. 26,000, representing four months of prepaid insurance. When the policy expired, the firm purchased for cash a new three-year policy for Rs. 252,000.

2. On July 1, 1996, the balance in the firms supplies account was Rs. 64,000. In November 1996, Rs. 106,000 of supplies were purchased on account. As of June 30, 1997, all of the original supplies had been used, and two-thirds of the supplies purchased in November had been used.

3. The firms rental agreement on its office and stores calls for a monthly rental of Rs. 72,000 per month plus 1% of the firms gross revenues. The monthly portion of Rs. 72,000 is payable at the beginning of each month. The 1-% portion is payable once a year, on July 15, based on the prior years gross revenues. Gross revenues for the year ended June 30, 1995 were Rs. 9,750,000.

Required

1. Make the appropriate journal entries to record the initial transactions between July 1, 1996 and June 30, 1997.

2. Make the necessary adjusting entries at June 30, 1997.