On December 31, 2020, you are hired by LocoRoco Inc. as the new bookkeeper due to its dismissal of the prior bookkeeper who was not doing a good job. LocoRoco engages in various business activities, such as construction, office space rental, and equipment sales. The company has a calendar year-end. You notice a few irregularities as follows: 1) Year-end wages payable was under-reported by $400. 2) A physical count of supplies on hand on December 31, 2020 totaled $1,300. The prior bookkeeper failed to account for any cash purchases and use of supplies. The beginning balance of Supplies was $500 and total purchases during the year amounted to $1,100. 3) On October 1, 2020, LocoRoco prepaid insurance for a 12-month policy beginning on the same day. The prior bookkeeper expensed the entire cost $24,000. 4) Reported sales revenue for the year is $8,640,000. This includes all sales taxes collected for the year, which have not been forwarded to the state's tax authorities yet. The sales tax rate is 4%. 5) LocoRoco entered into a contract to construct an office building three years ago. In the current year, LocoRoco changed its revenue recognition method from percentage-of- completion to completed-contract. The company has been using the completed-contract method for tax reporting since the beginning of the construction project. Prior to the current year, pre-tax income under the two methods was as follows: completed-contract $330,000, and percentage-of-completion $470,000. The prior bookkeeper did not record the change in accounting principle but correctly reported the current-year pre-tax income under the new method. LocoRoco is subject to a Federal tax rate of 21%. 6) On December 31, 2018, LocoRoco leased a machine to Nightingale Company. The lease was for 12 months (covering 2019) and LocoRoco received the full payment of $45,000 on that day. At the time of receipt, the prior bookkeeper debited Cash and credited Lease Revenue. No further entries related to this transaction have been made since then. 7) LocoRoco purchased a computer system for $78,750 on May 1, 2018. The system was depreciated on a 5-year life with no residual value, using the straight-line method. At the beginning of the current year, LocoRoco revised these estimates to a total useful life of 7 years and a residual value of $4,500. Depreciation on the machine for the current year has not yet been recorded. Instructions: Prepare the necessary correcting entries assuming that the books for the company have not been closed. Ignore income tax considerations except for Item #5