On March 31, 2012, Easy Rental Agency Inc.’s trial balance included the following unadjusted account balances. The company’s year-end is December 31 and it adjusts its accounts quarterly.
An analysis of the accounts shows the following:
1. The equipment, which was purchased on January 1, 2011, is estimated to have a useful life of four years.
2. One-third of the unearned rent revenue is still unearned at the end of the quarter.
3. The loan payable has an interest rate of 6%. Interest is paid monthly on the first of each following month and was last paid March 1, 2012.
4. Supplies on hand total $850 at March 31.
5. The one-year insurance policy was purchased for $14,400 on January 1, 2012.
6. Income tax is estimated to be $2,200 for the quarter.
Instructions
Prepare the quarterly adjusting entries required at March 31, 2012.
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