Please do the Adjusting Journal Entries (AJEs):

5. CMC prepays for some insurance and advertising. The Prepaid Expense account has a balance of $26,774 at year end but before adjustment. This balance includes $12,200 for a two-year casualty insurance policy purchased on March 1, 2017. Of the remaining prepaid balance, 60% of the advertising has now been used. (Round to the nearest whole dollar.)

6. CMC records depreciation and amortization expense annually as one compound adjusting journal entry. They do not use an accumulated amortization account. Annual depreciation rates are 7% for Buildings/Equipment/Furniture, no salvage. (Round to the nearest whole dollar.) Annual Amortization rates are 10% of original cost, straight-line method, no salvage. The patent was acquired on October 1, 2015. The last time depreciation & amortization were recorded was December 31, 2016.

7. The long-term liabilities were outstanding for all of 2017 and accrue interest at 8% APR. CMC records accrued interest quarterly (interest was last updated on Sept. 30.) The company is required to pay the interest annually each January 1st.

8. CMC often allows customers to finance the purchase of their products through long-term lending agreements and therefore reports Long-term Notes Receivable on their Balance Sheet. These notes are interest bearing and earn CMC interest revenue. The beginning balance of Interest Receivable at January 1, 2017 was $3,500. During 2017, cash received from customers for interest on these notes amounted to $17,600. You determine that the income statement for the year-ended December 31, 2017 should show Interest Revenue in the amount of $21,800. The adjusting entry to accrue interest revenue has not yet been recorded.

9. On December 15, CMC declared a dividend of $150,000, to be paid on January 20, 2018. It had not yet been recorded.

10. At December 31, the Long-Term Investments (Available-for-sale securities or AFS) had a fair value of $180,190. The AFS Investment was originally purchased on May 1, 2017 for $160,500. CMC uses a Fair Value Adjustment account (an adjunct/contra account to the Investments) to mark-to-market the investment portfolio at year end. CMCs tax rate is 21%.

11. Income tax is based on a 21% tax rate.

M Corporation Balance Sheet December 31, 2017 December 31, 2016 Assets US$92,063 913,780 Cash and cash equivalents Accounts receivable Allowance for doubtful accounts Inventory Interest Receivable Prepaid expenses Other current assets US$120,670 516,454 24,975 26,774 4574 Total current assets 2,289,378 ,435,062 Investments +/-Fair Value Adjustment Notes Receivable 160,500 160,500 48 Property, plant and equipment Accumulated depreciation 255 (591,965) 656,465 Net fixed assets 901,727 608 Other Assets Goodwil Other intangible assets 217,000 108,700 710,951 196.440 Total assets US$4,282,556 US$2,287,792 Liabilities and Stockholders' Equit Current liabilities Accounts payable Dividends payable Unearned revenue Interest payable Wages payable Payroll taxes payable Income taxes payable US$1,169,343 US$315,395 48,000 08 41,310 81,350 8,850 6,500 8,200 9,033 279,850 Total current liabilities 62 845,198 Long-term liabilities 278,525 Stockholders' equ Contributed capital Common stock, $2 par value (4,000,000 shares authorized,460,000 issued; 440,000 are outstandin 920,000 105,000 920,000 05,000 Paid-in capital common stock Total contributed capital Retained earnings Accumulated other c Less common stock in treasurv, at cost 1.400.783 539.069 0 400,000 hensive income 400,000 Total stockholders' equit Total liabilities and stockholders US$4,282,556 US$2,287,792 M Corporation Balance Sheet December 31, 2017 December 31, 2016 Assets US$92,063 913,780 Cash and cash equivalents Accounts receivable Allowance for doubtful accounts Inventory Interest Receivable Prepaid expenses Other current assets US$120,670 516,454 24,975 26,774 4574 Total current assets 2,289,378 ,435,062 Investments +/-Fair Value Adjustment Notes Receivable 160,500 160,500 48 Property, plant and equipment Accumulated depreciation 255 (591,965) 656,465 Net fixed assets 901,727 608 Other Assets Goodwil Other intangible assets 217,000 108,700 710,951 196.440 Total assets US$4,282,556 US$2,287,792 Liabilities and Stockholders' Equit Current liabilities Accounts payable Dividends payable Unearned revenue Interest payable Wages payable Payroll taxes payable Income taxes payable US$1,169,343 US$315,395 48,000 08 41,310 81,350 8,850 6,500 8,200 9,033 279,850 Total current liabilities 62 845,198 Long-term liabilities 278,525 Stockholders' equ Contributed capital Common stock, $2 par value (4,000,000 shares authorized,460,000 issued; 440,000 are outstandin 920,000 105,000 920,000 05,000 Paid-in capital common stock Total contributed capital Retained earnings Accumulated other c Less common stock in treasurv, at cost 1.400.783 539.069 0 400,000 hensive income 400,000 Total stockholders' equit Total liabilities and stockholders US$4,282,556 US$2,287,792