27. Bella Company had the following T-account entries: Prepaid Insurance Beg. $3,600 $600 1-May Bal $3,000 Insurance Expense 1-May $600 Bal $600 Based on this information, what happened on May 1st? a. Bella purchased $600 of Insurance for cash. b. Bella purchased $3,600 of Insurance for cash. C. Bella used up $600 of insurance that it had paid in advance. d. Bella earned $600 of revenue that it has received in advance. 28. Adjustments for deferred revenues include a. An increase to an expense and a decrease to an asset b. An increase to revenue and a decrease to a liability C. An increase to an asset and a decrease to an expense d. An increase to a liability and a decrease to revenue 29. As prepaid expenses expire with the passage of time, the correct adjusting entry will be a a debit to an asset account and a credit to an expense account. b. debit to an expense account and a credit to an asset account. C. debit to an asset account and a credit to an asset account. d debit to an expense account and a credit to an expense account 1. Depreciation is the process of a valuing an asset at its fair value. b. increasing the value of an asset over its useful life in a rational and systematic manner. Callocating the cost of an asset to expense over its useful life in a rational and systematic manner d writing down an asset to its real value each accounting period. Kwesi Company signed a four-month note payable in the amount of $20,000 on September 1. The note requires interest at an annual rate of 9%. The interest will be paid when the note comes due. The entry to record the accrued interest at the end of September is: a. Debit to Interest Expense: $150, Credit to Cash: $150 b. Debit to Interest Expense $150, Credit to Interest Payable $150 C. Debit to Interest Expense: $450, Credit to Cash: $450 d Debit to Interest Expense: $450, Credit to Interest Payable $450 e. Debit Interest Expense: $1,800, Credit Cash $1,800. 32. Litrer Company performed $56,000 of services throughout the year and collected $37,600 in cash throughout the year. Additionally, they incurred $32,300 in expenses and paid $22,100 in cash for expenses throughout the year. What is Litver's net income for the year under the ACCRUAL method? a $15,500 b. $23,700 C. $39,200 d. $8,200 D Focus