Identification of Adjusting Entries Sayed Inc. uses the accrual basis of accounting and had the following transactions during the year:

a. Sold merchandise to customers on credit.

b. Purchased equipment to be used in the operation of its business.

c. Purchased a two-year insurance contract.

d. Received cash for services to be performed over the next year.

e. Paid monthly employee salaries.

f. Borrowed money from First Bank by signing a note payable due in five years.

\section*{Required:}

Identify and explain why each transaction may or may not require adjustment.

\section*{Cornerstone Exercise