ABC Corporations year-end is 31 December. Based on an analysis of the unadjusted trial balance at 31 December, 2019, the following information was available: 1. Machinery costing $77,500 was acquired on 1 January 2019. It is estimated to have a useful life of six years. The machinery is estimated to have a $5,500 value at the end of its six-year life. 2. Accrued revenues at year-end totalled $14,500. 3. The Prepaid Insurance account showed a balance of $15,000. This was paid and takes effect on 1 January 2019 and represents a two-year policy. 4. Accrued salaries at year-end were $11,500. 5. $7,200 worth of advertising was prepaid on 1 January 2019 and debited to the Prepaid Advertising account. This covered twelve months of advertising beginning on the same date. 6. It was determined that $6,500 of completed work was included in the $10,000 Unearned Revenue account balance at year-end. 7. The Office Supplies account had a balance of $5,000 at the beginning of the accounting period. During the year, $30,500 of supplies were purchased and debited to the Office Supplies account. At year-end, a physical count of the supplies revealed $7,500 of office supplies available. Required: 1. Prepare adjusting journal entries as at 31 December, 2019, based on the above information. Include a short description for each entry. 2. Explain which GAAP principle(s) requires/require the recording of adjusting entries and why.