On December 1, 2020, the company paid its annual fire insurance premium of $2,400 for the year beginning December 1 and debited prepaid insurance. On August 31, 2020, the company borrowed $35,000 from a local bank. The note requires principal and interest at 8% to be paid on August 31, 2021. On December 1, 2020, the company paid its annual fire insurance premium of $2,400 for the year beginning December 1 and debited prepaid insurance. On August 31, 2020, the company borrowed $35,000 from a local bank. The note requires principal and interest at 8% to be paid on August 31, 2021