USA Car Rental Service, Inc., was organized to provide car rental service at the airport. It has just completed its second year of business. Its trial balance follows.

The following information is also available:
a. To obtain space at the airport, USA paid two years' rent in advance when it began the business.
b. An examination of insurance policies reveals that $2,000 expired during the year.
c. To provide regular maintenance for the vehicles, USA deposited $13,620 with a local garage. An examination of maintenance invoices reveals charges of $7,890 against the deposit.
d. An inventory of spare parts shows $2,170 on hand.
e. USA depreciates all of its cars at the rate of 12.5 percent per year. No cars were purchased during the year.
f. A payment of $2,000 for one full year's interest on notes payable is now due.
g. Unearned Rental Service Revenue on June 30 includes $20,325 for cars that customers prepaid but have not yet been rented.
h. Federal income taxes for the year are estimated to be $13,870.
Required
1. Determine the adjusting entries and enter them in the general journal (Page 14).
2. Open ledger accounts for the accounts in the trial balance plus the following: Interest Payable (213); Income Taxes Payable (214); Rent Expense (514); Insurance Expense (515); Spare Parts Expense (516); Depreciation Expense-Cars (517); Maintenance Expense (518); Interest Expense (519); and Income Taxes Expense (520). Record the balances shown in the trial balance.
3. Post the adjusting entries from the general journal to the ledger accounts, showing proper references.
4. Prepare an adjusted trial balance, an income statement, a statement of retained earnings, and a balance sheet.

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USA Car Rental Service, Inc. Trial Balance June 30, 2014 Cash (111) Accounts Receivable (113) Prepaid Rent (117) Prepaid Insurance (118) Prepaid Maintenance (119) Spare Parts (140) Cars (148) Accumulated Depreciation Cars (149) Notes Payable (211) Unearned Rental Service Revenue (212) Common Stock (311) Retained Earnings (312) 15,708 19,830 18,000 6,400 13,620 12,200 270,000 35,000 78,000 42,000 25,000 41,567 30,000 Rental Service Revenue (411) Gas and Oil Expense (510) Salaries Expense (511) Advertising Expense (513) 492,151 104,900 206,360 16,700 713,718 713,718