*E3-20B (Adjusting and Reversing Entries) When the accounts of David Nguyen Inc.

*E3-20B (Adjusting and Reversing Entries) When the accounts of David Nguyen Inc. are examined theadjusting data listed below are uncovered on December 31 the end of an annual fiscal period.1. The prepaid insurance account shows a debit of $7200 representing the cost of a 2-year fire insurancepolicy dated August 1 of the current year.2. On November 1 Rent Revenue was credited for $1500 representing revenue from a subrental fora 3-month period beginning on that date.3. Purchase of advertising materials for $1000 during the year was recorded in the Advertising Expenseaccount. On December 31 advertising materials of $300 are on hand.4. Interest of $850 has accrued on notes payable.InstructionsPrepare the following in general journal form.(a) The adjusting entry for each item.(b) The reversing entry for each item where appropriate.