Willow Window Washing Services prepares adjustments monthly and shows the following selected accounts on its December 31, 2023, unadjusted trial balance:

Required
Prepare the required monthly adjusting entries at December 31, 2023, based on the following additional information:
a. The remaining balance in Prepaid Insurance was for a six-month insurance policy purchased for $7,440 and in effect on September 1, 2023.
b. $5,200 of the balance in Prepaid Office Rent had not been used as at December 31, 2023.
c. $1,140 of the balance in Prepaid Subscriptions had been used as at December 31, 2023.
d. The company paid $33,840 on April 1, 2023, to rent equipment for a three-year period beginning April 1, 2023.

Analysis Component:
If the above adjustments were not recorded, identify the types of accounts that would be affected and if they would be over- or understated.

Transcribed Image Text:

Account Debit Credit Prepaid insurance $ 3,720 Prepaid office rent 23,000 Prepaid subscriptions 1,300 Prepaid equipment rental 26,320