Sarah Company's trial balance on December 31, 2013 (the end of its annual accounting period), included the following account balances before adjustments:

Reviewing the company's recorded transactions and accounting records for 2013, you find the following data pertaining to the December 31, 2013, adjustments:
1. On July 2, 2013, the company had accepted a $10,000, 9-month, 10% (annual rate) note receivable from a customer. The interest is to be collected when the note is collected.
2. On August 2, 2013, the company had paid $3,000 for a 2-year insurance policy.
3. The building was acquired in 1998 and is being depreciated using the straight-line method over a 25-year life. It has an estimated residual value of $8,000.
4. The delivery equipment was purchased on April 2, 2013. It is to be depreciated using the straight-line method over a 10-year life, with an estimated residual value of $2,000.
5. On September 1, 2013, the company had received 2 years' rent in advance ($4,320) for a portion of a building it is renting to Victoria Company.
6. On December 1, 2013, the company had issued a $7,200, 3-month, 12% (annual rate) note payable to a supplier. The interest is to be paid when the note is paid.
7. On January 2, 2013, the company purchased $1,000 of office supplies. A physical count on December 31, 2013, revealed that there are $400 of office supplies still on hand. No supplies were on hand at the beginning of the year.
Required:
Prepare the adjusting entries that are necessary to bring Sarah's accounts up to date on December 31, 2013. Each journal entry explanation should summarize your calculations.

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Debit $10,000 3,000 14,000 60,000 Notes Receivable Delivery Equipment Building Uneamed Rent $4,320 1,200 Office Supplies Expense 1,000