Exercise 3-6 (Algo) Preparing adjusting entries LO P1, P2, P3 a. Depreciation on the company's equipment for the year is computed to be $18,000. b. The Prepaid Insurance account had a $7,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company's insurance policies showed that $1,770 of unexpired insurance coverage remains. c. The Supplies account had a $350 debit balance at the beginning of the year, and $2,680 of supplies were purchased during the year. The December 31 physical count showed $413 of supplies available. d. One-fourth of the work related to $11,000 of cash received in advance was performed this period. e. The Prepaid Rent account had a $5,600 debit balance at December 31 before adjusting for the costs of expired prepaid rent. An analysis of the rental agreement showed that $3,830 of prepaid rent had expired. f. Wage expenses of $3,000 have been incurred but are not paid as of December 31. Prepare adjusting journal entries for the year ended December 31 for each separate situation. Answer is complete but not entirely correct. 1 No a. Transaction General Journal Depreciation expense-Equipment Accumulated depreciation-Equipment N 2 b. Insurance expense Prepaid insurance 3 C. Supplies expense Supplies 4 Debit Credit 18,000 18,000 4,000 4,000 2,617 2,617 Unearned revenue 9,000 Services revenue 9,000 5 e. Rent expense Prepaid rent 3,830 3,830 6 Wages expense 3,000 Wages payable 3,000