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Fes Company is making adjusting journal entries for the year ended December 31, 2013. In developing information for the adjusting journal entries, you learned the following: a. A three-year insurance premium of $7,200 was paid on January 1, 2013, for coverage beginning on that date. As of December 31, 2013, the unadjusted balances were $7,200 for Prepaid Insurance and $0 for Insurance Expense. b. At December 31, 2013, you obtained the following data relating to supplies. Unadjusted balance in Supplies on December 31, 2013 $15,000 Unadjusted balance in Supplies Expense on December 31, 72,000 2013 Supplies on hand, counted on December 31, 2013 10,000 Required: 1. Of the $7,200 paid for insurance, what amount should be reported on the 2013 income statement as Insurance Expense? What amount should be reported on the December 31, 2013, balance sheet as Prepaid Insurance? Answer is complete and correct. Insurance Expense 2,400 Prepaid Insurance 4,8002. What amount should be reported on the 2013 income statement as Supplies Expense? What amount should be reported on the December 31, 2013, balance sheet as Supplies? Answer is complete and correct. Supplies Expense EA 77,000 Supplies 10,000 3. Indicate the accounting equation effects of the adjustment required for (a) insurance and (b) supplies. (Enter all amounts as positive values.) x Answer is not complete. Transaction Assets = Liabilities + Stockholders' Equity a - 2,400 - 2,400 b. -5,000 -5,000