The unadjusted trial balance of Larkspur, Inc., a private company following ASPE, at December 31, 2020, is as follows:

		Debit		Credit
Cash		$17,800
Accounts receivable		105,100
Allowance for doubtful accounts				$3,290
Inventory		61,900
Prepaid insurance		4,604
Bond investment at amortized cost		40,400
Land		29,600
Buildings		156,600
Accumulated depreciationbuildings				25,180
Equipment		32,880
Accumulated depreciationequipment				5,480
Goodwill		16,300
Accounts payable				100,800
Bonds payable (20-year, 6%)				180,000
Common shares				119,500
Retained earnings				33,659
Sales revenue				185,500
Rent revenue				10,725
Rent expense		23,550
Supplies expense		10,050
Purchases		98,300
Purchase discounts				750
Salaries and wages expense		55,500
Interest expense		12,300
		$664,884		$664,884

Additional information:

1.		Actual rent costs amounted to $1,570 per month. The company has already paid for rent for the first quarter of 2021.
2.		The building was purchased and occupied on January 1, 2018, with an estimated useful life of 10 years, and residual value of $30,700. (The company uses straight-line depreciation.)
3.		Prepaid insurance contains the premium costs of several policies, including Policy A, cost of $2,588, 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.
4.		A portion of Larkspurs building has been converted into a snack bar that has been rented to the Blue Spruce Corp. since July 1, 2019, at a rate of $7,150 per year payable each July 1 in advance.
5.		One of the companys customers declared bankruptcy on December 30, 2020. It is now certain that the $2,100 the customer owes will never be collected. This fact has not been recorded. In addition, Larkspur estimates that 4% of the Accounts Receivable balance on December 31, 2020, will become uncollectible.
6.		An advance of $580 to a salesperson on December 31, 2020, was charged to Salaries and Wages Expense.
7.		On November 1, 2018, Larkspur issued 180 $1,000 bonds at par value. Interest is paid semi-annually on April 30 and October 31.
8.		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.)
9.		On August 1, 2020, Larkspur purchased at par value 40 $1,010, 9% bonds maturing on July 31, 2022. Interest is paid on July 31 and January 31.
10.		The inventory on hand at December 31, 2020, was $90,500 after a physical inventory count. (Use "Inventory" account for closing out the beginning inventory amount and recording the ending inventory amount.)

(a)

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 0 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.
8.
9.
10.