The trial balance of Sunray Co. is shown below. The following the year-end adjustments:

1. 2% of the total accounts receivable is doubtful of collection

2. Depreciation for the year is not yet recognized. The equipmen has a 10-year useful life. Sunray Co. uses the straight li method.

3. The notes payable was issued on September 1, 20x1. Interest 10% is due annually.

4. Sunray rents its office space. Monthly rental of $2,000 is due a the end of each month. Sunray Co. has not yet paid its rent for the month of December 31, 20x1.

Requirements:

a. Prepare the year-end adjusting entries.

b. Complete the worksheet below.