Accounting for Prepayments. The Ortiz Company, a wholesale distributor of home appliances, began business on July 1, 20X2. The following summarized transactions occurred during July.

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1. Ortiz's stockholders contributed $250,000 in cash in exchange for their common stock. 2. On July 1, Ortiz signed a 1-year lease on a warehouse, paying $60,000 cash in advance for occu- pancy of 12 months. 3. On July 1, Ortiz acquired warehouse equipment for $100,000. A cash down payment of $40,000 was made, and a note payable was signed for the balance. 4. On July 1, Ortiz paid $24,000 cash for a 2-year insurance policy covering fire, casualty, and related risks. 5. Ortiz acquired assorted merchandise for $35,000 cash. 6. Ortiz acquired assorted merchandise for $190,000 on open account. 7. Total sales were $200,000, of which $30,000 were for cash. 8. Cost of inventory sold was $160,000. 9. Rent expense was recognized for the month of July. 10. Depreciation expense of $2,000 was recognized for the month. 11. Insurance expense was recognized for the month. 12. Collected $35,000 from credit customers. 13. Disbursed $80,000 to trade creditors. For simplicity, ignore all other possible expenses.