Drake Ltd. provides engineering consulting services to various clients. The company’s year-end is December 31 and adjusting entries are only prepared at year-end, on December 31. For each of the following situations, prepare the necessary adjusting entries on December 31, 2020. If no entry is required, clearly indicate by writing “No Entry”.

1. On January 1, 2020, Drake Ltd had a balance in the Prepaid Insurance account in the amount of $3,600 representing 9 months insurance (up to September 30, 2020). On September 29, 2020 Drake purchased a 1 year insurance policy, beginning on October 1 for $3,000. Drake recorded the payment to Prepaid Insurance.