Asset recognition and valuation. The following transactions relate to Eli Lilly and Company, a pharmaceutical firm. Indicate whether or not each transaction immediately gives rise to an asset of the company under GAAP. If accounting recognizes an asset, state the account title and amount.

a. The firm sends a check for \(\$ 12,000,000\) to an insurance company for liability insurance. The period of coverage begins next month.

b. The firm issues a check for \(\$ 500,000\) as a deposit on specially designed scientific equipment. The equipment will have a total purchase price of \(\$ 2,000,000\) and will be completed and delivered next year.

c. The firm acquires shares of common stock in Genetic Engineering, Inc., a leading firm in genetics research, for \(\$ 325,000\). Eli Lilly holds these shares with the expectation of developing long-term relations with this genetic engineering firm.

d. The firm acquires chemicals, used as raw materials in its pharmaceutical products, at a list price of \(\$ 800,000\), with payment made in time to secure a 2 percent discount for prompt payment. Eli Lilly treats cash discounts as a reduction in the acquisition cost of inventory.

e. The firm hires a well-known scientist to manage its research and development activities. Employment begins next month. One-twelfth of the annual salary of \(\$ 480,000\) is payable at the end of each month worked.

f. The firm purchases bonds with a face value of \(\$ 3,000,000\) for \(\$ 3,200,000\). The bonds mature in 20 years and require interest payments of 8 percent annually. Eli Lilly made the investment with temporarily excess cash and intends to sell the bonds when it needs cash.

g. The firm receives an order from Revco Drug Stores for \(\$ 15,000\) of pharmaceutical products.

h. The firm receives notice that a supplier has shipped by freight raw materials billed at \(\$ 200,000\) with payment due in 30 days. Eli Lilly obtains title to the goods as soon as the supplier ships them to the buyer.