Instruction

Prepare a correct trial balance. (Note: It may be necessary to add one or more accounts to the trial balance.)

E3.5 (LO 3) (Adjusting Entries) The ledger of Duggan Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.

		Debit		Credit
Prepaid Insurance		$ 3,600
Supplies		2,800
Equipment		25,000
Accumulated DepreciationEquipment				$ 8,400
Notes Payable				20,000
Unearned Rent Revenue				9,300
Rent Revenue				60,000
Interest Expense		0
Salaries and Wages Expense		14,000

An analysis of the accounts shows the following.

1. The equipment depreciates $250 per month.

2. One-third of the unearned rent was recognized as revenue during the quarter.

3. Interest of $500 is accrued on the notes payable.

4. Supplies on hand total $850.

5. Insurance expires at the rate of $300 per month.