As part of an internal audit, the following fact was discovered. The audit occurred during 2018 before any adjusting entries or closing entries were prepared.

A five-year casualty insurance policy was purchased at the beginning of 2016 for $35,000. The full amount was debited to insurance expense at the time.Prepare necessary entries (or an entry) in 2018.

A machine with a five-year life was purchased on January 1, 2017. The machine cost $20,000 and has no expected salvage value. No depreciation was taken in 2017 or 2018. Assume the straight-line method for depreciation.Prepare necessary entries (or an entry) in 2018.