A company has a fiscal year-end of December 31: (1) on October 1, $20,000 was paid for a one-year fire insurance policy; (2) on June |30 the company advanced its chief financial officer $18,000; principal and interest at 8% on the note are due in one year; and (3) equipment costing $68,000 was purchased at the beginning of the year for cash. Depreciation on the equipment is $13,600 per year. Prepare the necessary adjusting entries at December 31 for each of the above items. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Date        Accounts Title and Explanation         Debit        Credit

Dec 31Insurance Expense                              $5,000

               [($20000/12) x 3]

                      Prepaid Insurance                                           $5,000

               (To record insurance expense)

Dec 31     Interest Receivable                                $720

                [($18000 x 8%)/12 x 6]

                     Interest Income                                                  $720

               (To record accrual interest income)  

Dec 31       Depreciation Expense                       $13,600  

                     Accumulated Depreciation                          $13,600

                     -Equipment

               (To record depreciation expense)

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