Lily Company began business on January 1, 2017. The companys year-end is December 31. The following events occurred during the first year of operations: Apr. 1 Paid cash in the amount of $24,000 for a one-year rental contract on a building. July 1 Received $60,000 in cash from customers for services to be provided evenly during the next twelve months. Oct. 1 Acquired a building by borrowing $300,000 at 6% interest, principal and interest payable at maturity in ten years. Annual depreciation expense is $12,000.

1. Prepare the necessary adjusting journal entries at December 31 (10 points total). (Hint: Four adjusting entries are necessary.)

2. Bonus: For each of the adjusting entries, indicate which of the following type of entry was recorded: accrued expense, accrued revenue, deferred expense, or deferred revenue (2 points total).