1. Assume that Pollys accounting year ends on December 31. Identify and analyze the effect of any necessary adjusting entries based on transactions below. Do not round intermediate calculations. If required, round your final answers to the nearest cent. Use full months instead of days when calculating interest expense. b. On May 1, land was purchased for $44,500. A 20% down payment was made, and an 18-month, 8% note was signed for the remainder.

2. On June 1, Polly signed a one-year, $15,000 note to First State Bank and received $13,800.

Activity	- Select your answer -OperatingInvestingFinancingCorrect 1 of Item 17
Accounts	- Select your answer -Discount on Notes Payable Increase, Interest Expense IncreaseDiscount on Notes Payable Increase, Interest Expense DecreaseDiscount on Notes Payable Decrease, Interest Expense IncreaseDiscount on Notes Payable Decrease, Interest Expense DecreaseCorrect 2 of Item 17
Statement(s)	- Select your answer -Balance Sheet onlyIncome Statement onlyBalance Sheet and Income StatementCorrect 3 of Item 17