The unadjusted trial balance of Teal Mountain Inc., a private company following ASPE, at December 31, 2020, is as follows: Cash Accounts receivable Allowance for doubtful accounts Inventory Prepaid insurance Bond investment at amortized cost Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Goodwill Accounts payable Bonds payable (20-year, 8%) Common shares Retained earnings Sales revenue Rent revenue Rent expense Supplies expense Purchases Purchase discounts Salaries and wages expense Debit $17,390 104,100 61,600 4,720 58,800 28,900 151,600 34,200 16,750 23,250 10,600 97,000 55,000 Credit $3,370 12,010 5,700 100,600 162,000 116,300 73,440 190,500 11,250 890 Interest expense Additional information: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 12,150 $676,060 $676,060 Actual rent costs amounted to $1,550 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 $31,500. (The company uses straight-line depreciation.) Prepaid insurance contains the premium costs of several policies, including Policy A, cost of $2,668, one-year term, taken out on April 1, 2020; and Policy B, cost of $2,052, three-year term, taken out on September 1, 2020. A portion of Teal Mountain's building has been converted into a snack bar that has been rented to the Indigo Corporation since July 1, 2019, at a rate of $7,500 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 $2,100 the customer owes will never be collected. This fact has not been recorded. In addition, Teal Mountain estimates that 4% of the Accounts Receivable balance on December 31, 2020, will become uncollectible. An advance of $600 to a salesperson on December 31, 2020, was charged to Salaries and Wages Expense. On November 1, 2018, Teal Mountain issued 162 $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, Teal Mountain purchased at par value 40 $1,470, 9% bonds maturing on July 31, 2022. Interest is paid on July 31 and January 31. The inventory on hand at December 31, 2020, was $89,800 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.) No. Account Titles and Explanation 1. 2. 3. 4. 5. (To record write-off of uncollectible accounts receivable.) Debit Credit 6. 7. 8. 9. 10.