A. 1)

August 6: Pane purchases land with cash. At the time of purchase, Pane also had to pay for survey fees and costs to demolish a building on the land.							9
		Cost of Land		$345,000
		Demolish Building		$2,000
		Survey Fees		$300

2)

On December 31, Pane was notified that their one of their customers filed bankruptcy and would not be able to pay off their $2,000 account receivable.

3)

March 12: Pane purchased a one year insurance policy with coverage beginning on April 1.
		Insurance Policy		$40,000

B . Record closing journal entries for the previous entries

Recognize the expiration of the prepaid insurance policy.

Record bad debt expense for the year, assuming uses 2% of accounts receivable to estimate their uncollectible accounts.