Bob's Bikes- 5 True and False questions (15 minutes) After reviewing the following list of 5 transactions, Questions 35 to 40 , for Bob's Bikes Incorporated for the calendar year 2022, identify for each_transactions whether the correct application of accrual based accounting was used. Bob's Bikes prepares adjusting entries monthly Question 36 ( 3 points) On January 1, 2022 Bob's Bikes purchased prepaid insurance for $1,000 for the year ended December 31, 2022. On January 1, the accountant recorded this as a $1,000 debit to Prepaid Insurance and $1,000 credit to Cash. This was recorded correctly in the accounting records True False The company quoted a customer $1,200 to build a custom bike in February, built the custom bike in March, delivered the bike in March, sent the customer an invoice in April and received payment for the bike in May. Bob's Bikes recorded the sale in April. . This was recorded correctly in the accounting records True False Question 38 (3 points) - A physical count of supplies on hand was taken on both January 1 and January 31 with the following results: - January 1, \$350 - January 31,$120 Total purchases of supplies during the month were $670. The accountant recorded $900 as Supplies Expense for the month of January. . This was recorded correctly in the accounting records True False On January 1, Bob's Bikes borrowed $50,000 from the bank for a two-year period. The bank loan is due at maturity but monthly interest payments of $375 are due at the end each quarter to the bank. On March 31, the accountant recorded Interest Expense of $1,125($3753) when the first interest installment was paid. . This was recorded correctly in the accounting records True False Question 40 (3 points) The Advertising Expense account had a balance of $4,850 on December 31, 2022. The following information was also available. - Included in the $4,850 was the cost of an ad that was to be placed in the January 2023 issue of Biker Magazine. The ad cost was $450. An invoice for promotional materials totalling $350 was received on January 3,2023. The materials were received by Bob's on December 28 ,and are included in the $4,850 balance. The Advertising Expense account had a balance of $4,850 on December 31, 2022. The following information was also available. - Included in the $4,850 was the cost of an ad that was to be placed in the January 2023 issue of Biker Magazine. The ad cost was $450. An invoice for promotional materials totalling $350 was received on January 3, 2023. The materials were received by Bob's on December 28 ,and are included in the $4,850 balance. After considering the above, the accountant reduced Advertising Expense on December 31, 2022 by $450. . This was recorded correctly in the accounting records True False