AutoParts Co. is reviewing its financial performance for the year ending December 31, 20X1. The company had the following transactions related to expenses:

• January 1: Paid $60,000 for rent for the entire year.
• April 1: Purchased supplies costing $20,000 on account.
• July 1: Paid $10,000 in wages to employees.
• October 1: Accrued $15,000 in interest expense on a loan.

Required:

1. Prepare the journal entries for each of the above transactions.
2. Calculate the total expenses recognized for the year ending December 31, 20X1.
3. Prepare the expense section of the income statement for the year.
4. Discuss the impact of accrual accounting on expense recognition and the company’s profitability.