Chapter 3: Adjusting Entries Supplement Worksheet Exercis a) On July 1, 2017, Lopez Company paid $1,200 for six months of insurance coverage. No adjustments have been made to the Prepaid Insurance account, and it is now December 31, 2017. Prepare the journal entry to reflect expiration of the insurance as of December 31, 2017. b) Zim Company has a Supplies account balance of $5,000 on January 1, 2017. During 2017, it purchased $2,000 of supplies. As of December 31, 2017, a supplies inventory shows $800 of supplies available. Prepare the adjusting journal entry to correctly report the balance of the Supplies account and the Supplies Expense account as of December 31, 2017. 4. Prepaid Expense " Depreciation, Exercise 4-8- On July 1, 2014, Dexter Corp. buys a computer system for $260,000 in cash. Assume that the computer is expected to have a four-year life and an estimated salvage value of $20,000 at the end of that time. Required 1. Identify and analyze the transaction to record the purchase of the computer on July 1, 2014. 2. Compute the depreciable cost of the computer. 3. Using the straight-line method [(cost -salvage)/lifel, compute the monthly depreciation. 4. Identify and analyze the adjustment to record depreciation at the end of July 2014. 5. Compute the book value that will be shown on Dexter's balance sheet prepared on Dec. 31, 2014