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

		Debit		Credit
Cash		$17,560
Accounts receivable		105,300
Allowance for doubtful accounts				$3,220
Inventory		59,800
Prepaid insurance		4,620
Bond investment at amortized cost		53,760
Land		31,300
Buildings		154,905
Accumulated depreciationbuildings				16,814
Equipment		34,800
Accumulated depreciationequipment				6,960
Goodwill		16,350
Accounts payable				100,800
Bonds payable (20-year, 7%)				174,000
Common shares				120,800
Retained earnings				53,086
Sales revenue				188,500
Rent revenue				11,025
Rent expense		21,150
Supplies expense		10,700
Purchases		98,600
Purchase discounts				790
Salaries and wages expense		54,200
Interest expense		12,950
		$675,995		$675,995

Additional information:

1.		Actual rent costs amounted to $1,410 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 15 years, and residual value of $28,800. (The company uses straight-line depreciation.)
3.		Prepaid insurance contains the premium costs of several policies, including Policy A, cost of $2,604, 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 Sage Hill's building has been converted into a snack bar that has been rented to the Cheyenne Corp. since July 1, 2019, at a rate of $7,350 per year payable each July 1 in advance.
5.		One of the company's customers declared bankruptcy on December 30, 2020. It is now certain that the $2,300 the customer owes will never be collected. This fact has not been recorded. In addition, Sage Hill estimates that 3% of the Accounts Receivable balance on December 31, 2020, will become uncollectible.
6.		An advance of $610 to a salesperson on December 31, 2020, was charged to Salaries and Wages Expense.
7.		On November 1, 2018, Sage Hill issued 174 $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 10 years, and no residual value. (The company uses straight-line depreciation.)
9.		On August 1, 2020, Sage Hill purchased at par value 42 $1,280, 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 $90,200 after a physical inventory count. (Use "Inventory" account for closing out the beginning inventory amount and recording the ending inventory amount.)

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.)

Indicate which of the adjusting entries could be reversed.

Journal Entry 1		Could be reversedCould not be reversed
Journal Entry 2		Could be reversedCould not be reversed
Journal Entry 3		Could be reversedCould not be reversed
Journal Entry 4		Could be reversedCould not be reversed
Journal Entry 5		Could be reversedCould not be reversed
Journal Entry 6		Could be reversedCould not be reversed
Journal Entry 7		Could be reversedCould not be reversed
Journal Entry 8		Could be reversedCould not be reversed
Journal Entry 9		Could be reversedCould not be reversed
Journal Entry 10		Could be reversedCould not be reversed