1. A company has a fiscal year-end of December 31: (1) on October 1, $12,000 was paid for a one-year fire insurance policy; (2) on June 30 the company advanced its chief financial officer $10,000; principal and interest at 6% on the note are due in one year; and (3) equipment costing $60,000 was purchased at the beginning of the year for cash. Depreciation on the equipment is $12,000 per year.

Prepare the necessary adjusting entries at December 31 for each of the above items.

a. On October 1, $12,000 was paid for a one-year fire insurance policy.

b. On June 30 the company lent its chief financial officer $10,000; principal and interest at 6% are due in one year.

c. Equipment costing $60,000 was purchased at the beginning of the year for cash. Depreciation on the equipment is $12,000 per year.