The following information was extracted from the accounting records of the business of Wendy’s Lawnmowing Services.

Payments made during the year ended 30 June 2019 were as follows.

Assume that whenever cash was paid, the debit entry was made to the appropriate expense account, rather than the asset or liability, for the year. The only exception to this is the first payment for the year which is split between the accrual or deferral and the expense.

Required

(a) Write up and balance the Rent Payable, Prepaid Rates, and Prepaid Insurance accounts in the ledger of Wendy’s Lawnmowing Services for the year 1 July 2018 to 30 June 2019.

(b) Show clearly any adjusting entries that may be required on 30 June 2019. Explain why these adjusting entries are necessary.

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Account balances at 1 July 2018: Rent accrued Rates prepaid Insurance prepaid $3600 2400 2400