Latt Da Coffee has a calendar year-end. The following transactions occurred during the year:

• On September 1, it paid for an insurance policy for $6,120. It is a 9-month contract. You may assume an equal amount of the insurance is used up for each month the policy is valid.
• On October 10, it received $2,450 from a customer for prepaid coffee beans. The customer will be receiving the coffee beans in an equal amount for the next seven (7) consecutive months.
• On December 1, it billed $687 for coffee which a customer had purchased. The customer paid the bill in full on December 19.
• On December 12, it received an invoice from the fuel company for $866. It paid the invoice on December 30.

Questions:

1. For each transaction, prepare the journal entry to record the initial transaction. Make sure to properly format your journal entry. (HINT: there are four journal entries you must make.) (Each correct journal entry is worth 1 point.)
2. For each transaction, prepare any necessary adjusting journal entry as of December 31 (or any other applicable date provided). Make sure to properly format your journal entry. You may properly assume no adjusting entries were prepared at the end of each month. (HINT: there are four journal entries you must make.) (Each correct journal entry is worth 1 point.)

SPECIFIC INSTRUCTIONS: For each journal entry, type your response in the following format:

DR (account name) $(amount) CR (account name) $(amount)

For example, if you are making an entry to debit Cash for $100 and credit Accounts Payable for $100, you would enter the following:

DR Cash $100 CR Accounts Payable $100