Adjusting Entries Bali Company reports on a calendar-year basis. During 2000, the company engaged in the following transactions:

1. A two-year insurance policy was purchased on May 1, and the full premium of $5,400 for the two years was prepaid.

2. A four-year lease, effective October 1, was signed on equipment, and $18,000 was paid for the first year’s rent.

3. Payment for new service contracts in the amount of

$72,000 was received on July 31. Bali will provide the purchased services evenly over a one-year period beginning August 1.

4. On December 1, Bali borrowed $250,000 from Great Nation Bank on a five-year, 9 percent note. Interest is paid annually on November 30.

a. Record each of the listed transactions on the books of Bali Company in general journal form.

b. Record in general journal form any adjusting entries needed by Bali at the end of 2000.