You have been engaged to review the financial statements of Waterway Inc. In the course of your investigation you find a number of irregularities during the current year.

Insurance for a $6-$month period purchased on October $1$ of this year was charged to prepaid insurance in the amount of $$5,800.$

Year$-$end estimate of bonuses totaled $$54,000$ and was not recorded because the payment would not be made until next year.

Warranty expense averages $5\%$ on current year sales of $$5,940,000.$ Warranty expense is automatically debited for $5\%$ of each sale. During the current year, the company also paid $$267,300$ in warranty related claims. The bookkeeper thought that the payments were an expense and debited warranty expense.

Office rent is paid quarterly in advance. The first quarter rent for next year $($$$23,000)$ was paid in December and rent expense was debited.

Prepare the necessary correcting entries, assuming that Waterway Inc. uses a calendar$-$year basis. $($Credit account titlles are automatically indented when amount is entered. Do not indent manually: If no entry is required, selecit $"$No Entry" for the account titles and enter $0$ for the announts. List alll debit entries before credit entries.$)$

No$.$ Account Titles and Explanation

Debit

Credit

$$

$$

$$

$$

$$

$$

$$

$$

$$