Clapton Guitar Company entered into the following transactionsduring 2016. [The transactions were properly recorded inpermanent (balance sheet) accounts unless otherwiseindicated.]

Date	Transaction
Jan.25	Purchased $480 of officesupplies.
Feb.1	Rented a warehouse from HendrixCompany, paying 1 year’s rent of $3,600 in advance. Recorded the$3,600 payment as rent expense.
Mar.1	Borrowed $10,000 from the bank,signing a 1-year note at an annual interest rate of 12%. The bankinsisted on collecting the interest in advance, so it withheld theinterest amount from the funds disbursed to Clapton. The companyrecorded the transaction as a debit to Cash, $8,800, a debit toInterest Expense, $1,200, and a credit to Notes Payable,$10,000.
May1	Purchased office equipment for$15,000, paying $3,000 down and signing a 2-year, 12% (annual rate)note payable for the balance. The office equipment is expected tohave a useful life of 10 years and a residual value of $1,500.Straight-line depreciation is appropriate.
May31	Purchased a 3-year comprehensiveinsurance policy for $720.
Aug.1	Sold land for $9,000. The purchasermade a $2,000 down payment and signed a 1-year, 10% note for thebalance. The interest and principal will be collected on thematurity date.
Oct.1	Rented a portion of the retailfloor space to Harrison Inc. for $120 per month, collecting 8months’ rent in advance. Recorded the $960 receipt as rentrevenue.
Nov.13	Issued checks to sales personnel totaling $900. The checks areadvances for expected travel costs during the remainder of theyear. Required On the basis of the precedinginformation, prepare journal entries to adjust Clapton’s books asof December 31, 2016.