The unadjusted trial balance of Kingbird, Inc., a private company following ASPE, at December 31, 2020, is as follows: Credit Cash Debit $17,690 109,600 $3,380 61,300 Accounts receivable Allowance for doubtful accounts Inventory Prepaid insurance Bond investment at amortized cost Land 4,692 48,000 30,000 150,100 11,890 32,400 5,400 16,600 Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Goodwill Accounts payable Bonds payable (20-year, 7%) Common shares Retained earnings Sales revenue Rent revenue Rent expense Supplies expense Purchases 101,900 180,000 120,600 48,847 180,000 11,175 20,250 10,500 97,300 Purchase discounts 940 Salaries and wages expense Interest expense 53,100 12,600 $664,132 $664,132 Additional information: 1. 2. 3. 4. 5. Actual rent costs amounted to $1,350 per month. The company has already paid for rent for the first quarter of 2021. The building was purchased and occupied on January 1, 2018, with an estimated useful life of 20 years, and residual value of $31,200.(The company uses straight-line depreciation.) Prepaid insurance contains the premium costs of several policies, including Policy A, cost of $2,676, one-year term, taken out on April 1, 2020; and Policy B, cost of $2,016, three-year term, taken out on September 1, 2020. A portion of Kingbird's building has been converted into a snack bar that has been rented to the Ayayai Corp. since July 1, 2019, at a rate of $7,450 per year payable each July 1 in advance. One of the company's customers declared bankruptcy on December 30, 2020. It is now certain that the $2,600 the customer owes will never be collected. This fact has not been recorded. In addition, Kingbird estimates that 4% of the Accounts Receivable balance on December 31, 2020, will become uncollectible. An advance of $550 to a salesperson on December 31, 2020, was charged to Salaries and Wages Expense. On November 1, 2018, Kingbird issued 180 $1,000 bonds at par value. Interest is paid semi-annually on April 30 and October 31. The equipment was purchased on January 1, 2018, with an estimated useful life of 12 years, and no residual value. (The company uses straight-line depreciation.) On August 1, 2020, Kingbird purchased at par value 40 $1,200,8% bonds maturing on July 31, 2022. Interest is paid on July 31 and January 31. The inventory on hand at December 31, 2020, was $89,400 after a physical inventory count. (Use "Inventory" account for closing out the beginning inventory amount and recording the ending inventory amount.) 6. 7. 8. 9. 10. Prepare adjusting and correcting entries for December 31, 2020, using the information given. Record the adjusting entry for inventory using a Cost of Goods Sold account. Prepare adjusting and correcting entries for December 31, 2020, using the information given. Record the adjusting entry for inventory using a Cost of Goods Sold account. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) No. Account Titles and Explanation Debit Credit 1. 2. 3. 4. 5. (To record write-off of uncollectible accounts receivable.) (To record bad debts expense.) 6. 7. od 9. 10