Accounting Creations was authorized to issue 3,000,000 shares of $1 par Common Stock but has only issued 650,000 shares of common stock as of 12/31/2018. No new shares were issued during 2018.

1.On the "Adjusting Journal Entries" worksheet, prepare in journal entry form all adjusting and correcting journal entries based on the following information. All information was provided to you as of 12/31/2018.(Round all numbers to the nearest dollar). Label journal entries a through t.

a.On April 1, 2018, Accounting Creations renewed a 16-month insurance policy for $15,000. All cash was paid at the time the policy was signed and insurance expense was increased. All other transactions involving insurance were properly recorded.

b.On November 1, 2018, Accounting Creations loaned a key supplier, $25,000. A promissory note was signed and issued. The note is due in full 6-months. The supplier agrees to pay interest on the note at an annual rate of 8%. Principle and interest will be paid at the end of the 6-months. The note was recorded in Notes Receivable and is the only note outstanding.

Accounting Creations Incorporated

End of Period Worksheet

For the Year Ended December 31, 2018

Unadjusted Adjusted

Account Title Trial Balance Adjustments Trial Balance

DR CR DR CR DR CR

Cash 330,000 -

Accounts Receivable 694,980 -

Allowance for Doubtful Accounts - 17,000

Interest Receivable - -

Merchandise Inventory 425,000 -

Prepaid Insurance - -

LIFO Reserve - 32,000

Prepaid Advertising - -

Prepaid Rent 17,000 -

Office Supplies 6,000 -

Note Receivable 25,000

Available for Sale Securities 375,000 -

Office Building 3,750,000 -

Accumulated Depreciation - Office Building - 87,500

Storage Building 1,275,000 -

Accumulated Depreciation - Storage Building - -

Land 750,000 -

Leasehold Improvements 225,000 -

Accumulated Depreciation - Leasehold Improvements - -

Office Equipment 325,000 -

Accumulated Depreciation - Office Equipment - 65,000

Patent 150,000 -

Accounts Payable - 345,000

Sales Tax Payable - -

Salaries Payable - 142,000

Payroll Taxes Payable - 25,000

Interest Payable - -

Income Tax Payable - -

Unearned Rent Revenue - -

Loan Payable - Onstar Bank - 650,000

Loan Payable - Coldstar Bank - 2,000,000

Common Stock - 650,000

Additional Paid in Capital - 1,998,750

Retained Earnings - 920,000

Accumulated Other Comprehensive Income - 25,000

Dividends 84,750 -

Sales - 4,528,200

Sales Returns and Allowances 42,250 -

Sales Discounts 19,250 -

Cost of Goods Sold 1,979,500 -

Sales Salaries Expense 436,400 -

Office Salaries Expense 274,000 -

Advertising Expense 16,000 -

Depreciation Expense - Office Building -

Depreciation Expense - Leasehold Improvements - -

Depreciation Expense - Office Equipment - -

Leasing Expense - Stores 132,000 -

Miscellaneous Selling Expense 23,000 -

Research & Development Expense 15,000

Rent Expense - Storage Facility - -

Insurance Expense 15,000 -

Office Supplies Expense 35,000 -

Miscellaneous Administrative Expense 9,170 -

Rent Revenue - 75,000

Interest Revenue on Note Receivable - -

Dividend Revenue on AFS Securities - 25,000

Interest Expense - -

Bad Debt Expense 35,000 -

Amortization Expense - -

Income Tax Expense - -

Payroll Taxes Expense 121,150 -

Rebate Expense - -

Unrealized holding loss - -

Depreciation Expense-Storage Building - -

Loss on Impairment - -

Rebate Liability - -

Restricted Cash for Future Expansion - -

11,585,450 11,585,450

I do not understand what A and B is asking