Instructions

a$.$ Construct T$-$accounts and enter the balances shown.

b$.$ Prepare adjusting journal entries for the following and post to the T$-$accounts. $($Omit explanations.$)$ Open additional T$-$accounts as necessary. $($The books are closed yearly on December $31.)$

Bad debt expense to be recorded is $$1,400.$

Equipment is depreciated based on a $7-$year life $($no salvage value$).$

Insurance expired during the year $$2,550.$

Interest accrued on notes payable $$3,360.$

Sales salaries and wages earned but not paid $$2,400.$

Advertising paid in advance $$700.$

It was charged to Advertising Expense when paid.

Office supplies on hand $$1,500,$ charged to Supplies Expense when purchased.

c$.$ Prepare closing entries and post to the accounts.