The ledger of Laurie Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.

Debit Credit

Prepaid Insurance $ 5,400

Supplies 4,500

Equipment 40,000

Accumulated DepreciationEquipment $12,600

Notes Payable 25,000

Unearned Rent Revenue 11,100

Rent Revenue 90,000

Interest Expense 0

Salaries and Wages Expense 20,000

An analysis of the accounts shows the following.

1. The equipment depreciates $600 per month.

2. Two-thirds of the unearned rent revenue was earned during the quarter.

3. The note payable is dated January 1 and bears 12% interest.

4. Supplies on hand total $800.

5. The insurance policy is a two-year policy dated January 1.

Instructions :

A. Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense.

B. Compute the ending balances for Prepaid Insurance, Unearned Rent Revenue, and Rent Revenue, and indicate in which financial statement those items will be reported.