BFI had $100 of office supplies at January 1, 2016 and purchased $2,000 of office supplies during 2016. BFI has $750 of office supplies on the shelf at December 31, 2016. How much office supplies expense should BFI recognize in the Income Statement for the year ended December 31, 2016? 1. $1,350 2. $750 3. $2,100 4. $0 5. None of the above 2.5 points QUESTION 26 On June 1, 2016, BFI paid $4,000 for a 24-month insurance policy effective July 1, 2016. What is the effect of the necessary adjusting journal entry? 1. Prepaid Insurance will decrease by $2,000. 2. Prepaid Insurance will decrease by $1,000. 3. Prepaid Insurance will increase by $2,000. 4. Prepaid Insurance will increase by $1,000. 5. Cash will decrease by $1,000.