FINANCIAL ACCOUNTING ADJUSTING ENTRIES REQUIRED HOMEWORK Prof. R. S. Clairo ON 12/31 (EFY) YOU HAVE BEEN ASKED TO MAKE THE REQUIRED ADJUSTING ENTRIES FROM THE FOLLOWING INFORMATION: A. ON 10/1 THE COMPANY ENTERED INTO A ONE YEAR DEVELOPMENT CONTRACT. THE TOTAL AMOUNT OF THE CONTRACT WAS $1,500,000. ON 10/1 THE COMPANY RECEIVED $200,000 AS A PREPAYMENT ON THE CONTRACT. THE BOOKKEEPER DEBITED CASH AND CREDITED CONTRACT REV. TO RECORD THE PREPAYMENT. ON 12/3120% OF THE CONTRACT WAS COMPLETED B. THE COMPANY PURCHASED LLABILITY INSURANCE ON 3/1 FOR ONE YEAR AND PAID $36,000 FOR THE POLICY. THE BOOKKEEPER DEBITED INSURANCE EXPENSE AND CREDITED CASH TO RECORD THE TRANSACTION