Journalize the following year end journal entries. Year end is December 31.

1. A short term note receivable was issued on October 1 for the amount of $100,000. The terms of the note were as follows: 7 months note at 2% interest.
2. The company uses the Statement of Financial Position method to record bad debt expense. At the end of the year Allowance for Doubtful accounts had a $2,000 credit balance and Accounts Receivable had a

$100,000 balance. The company expects that 7% of receivables will not be collected.

3. We found an invoice for advertising expense in the amount of $6,000. This invoice was not recorded in our records.
4. Prepaid insurance account has a balance of $200,000 and is for a 1-year policy. The policy was purchased on July 1.
5. The company uses the perpetual method for their merchandise inventory. At year end the inventory count was $5,000,000 but the merchandise inventory general ledger account balance was $5,500,000. Net realizable value of the inventory at year end was calculated to be $12,000,000.
6. Office supplies inventory was counted at the end of the year and was found to be $27,500. The general ledger account balance is $30,000.
7. Unearned revenue has a balance of 10,000. This is for an 8-month contract that we started on August 1.