Question

 When the accounts of Bonita Inc, are examined, the adjusting data listed below are uncovered on December 31, the end of an annual

 fiscal period.

 1. The prepaid insurance account shows a debit of $4,752, representing the cost of a 2-year fire insurance policy dated August 1 of the current year.

 2. On November 1, Rent Revenue was credited for $1,680, representing revenue from a submental for a 3-month period beginning on that date.

 3. Purchase of advertising materials for $726 during the year was recorded in the Advertising Expense account. On December 31, advertising materials of $262 are on hand.

 4. Interest of $815 has accrued on notes payable. The interest will be paid in January of the next year.

 Prepare the following in general journal form. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the omounts.)

 (a) The adjusting entry for each item.

 (b) The reversing entry for each item where appropriate.

Answer 1

Requirement b:

Adjusting Entries:

No.	Account Titles and Explanation	Debit	Credit
1.	No Entry
2.	No Entry
3.	No Entry
4.	Interest Payable	$ 815
	Interest Expense		$ 815