Question: Using the three-step process illustrated in the chapter, (1) identify the type of adjustment that is required for each of the following transactions (a) through

Using the three-step process illustrated in the chapter, (1) identify the type of adjustment that is required for each of the following transactions (a) through (c) for Morgan Marketing Company, (2) determine the amount of the adjustment, and (3) record the adjusting entry necessary at year-end December, 31, 2011.

a. Collected $1,000 rent for the period December 1, 2011, to April 1, 2012, which was credited to Unearned Rent Revenue on December 1, 2011.

b. Paid $3,800 for a two-year insurance premium on July 1, 2011; debited Prepaid Insurance for that amount.

c. Purchased a machine for $32,000 cash on January 1, 2008. The company estimates annual depreciation at $3,000.

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