he unadjusted trial balance of Ayayai Corp., a private company following ASPE, at December 31, 2020 is as follows:

		Debit		Credit
Cash		$ 10,000
Accounts receivable		55,000
Allowance for doubtful accounts				$ 700
FV-NI investments		8,000
Inventory		55,000
Prepaid insurance		2,712
Prepaid rent		11,004
FV-OCI investments		14,000
Bond investment at amortized cost		15,000
Land		10,000
Equipment		100,000
Accumulated depreciationequipment				15,000
Accounts payable				6,000
Bonds payable				50,000
Common shares				100,000
Retained earnings				84,716
Sales revenue				220,000
Rent revenue				9,600
Purchases		165,000
Purchase discounts				2,000
Freight out		8,500
Freight in		3,000
Salaries and wages expense		25,000
Interest expense		5,000
Miscellaneous expense		800
		$ 488,016		$ 488,016

Additional information:

1.		On November 1, 2020, Ayayai received $ 9,600 rent from its lessee for a 12-month lease beginning on that date. This was credited to Rent Revenue.
2.		Ayayai estimates that 5% of the Accounts Receivable balances on December 31, 2020, will be uncollectible. On December 28, 2020, the bookkeeper incorrectly credited Sales Revenue for a receipt of $ 1,000 on account. This error had not yet been corrected on December 31.
3.		After a physical count, inventory on hand at December 31, 2020, was $ 75,000. (Use "Inventory" account for closing out the beginning inventory amount and recording the ending inventory amount.)
4.		Prepaid insurance contains the premium costs of two policies: Policy A, cost of $ 1,200, two-year term, taken out on April 1, 2020; Policy B, cost of $ 1,512, three-year term, taken out on September 1, 2020.
5.		The regular rate of depreciation is 10% of cost per year. Acquisitions and retirements during a year are depreciated at half this rate. There were no retirements during the year. On December 31, 2019, the balance of Equipment was $ 85,000.
6.		On April 1, 2020, Ayayai issued at par value 50 $ 1,000, 10% bonds maturing on April 1, 2024. Interest is paid on April 1 and October 1.
7.		On August 1, 2020, Ayayai purchased at par value 15 $ 1,000, 10% Kingbird, Inc. bonds, maturing on July 31, 2022. Interest is paid on July 31 and January 31.
8.		On May 30, 2020, Ayayai rented a warehouse for $ 917 per month and debited Prepaid Rent for an advance payment of $ 11,004.
9.		Ayayais FV-NI investments consist of shares with total market value of $ 9,200 as at December 31, 2020.
10.		The FV-OCI investment is an investment of 450 shares in Yop Inc., with current market value of $ 20 per share as of December 31, 2020.

(a)

Prepare the year-end adjusting and correcting entries for December 31, 2020, using the information given. Record the adjusting entry for inventory using a Cost of Goods Sold account. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.	Account Titles and Explanation	Debit	Credit
1.
2.
	(To correct incorrect entry.)
	(To record bad debt expense.)
3.
4.
5.
6.
7.
8.
9.
10.