Indicate which of the following events would result in recognizing expenses for the year in which the described event takes place; give the journal entry. (Take the company’s point of view.)
1. Bright Shirts, Inc., sold 1,500 T-shirts to the FSU Bookstore for $16,500 cash. Bright originally paid $4,500 for the shirts.
2. Home Industries, Inc., received a utility bill for the last month of the year in the amount of $575 but won’t actually pay it until next year.
3. Waterline, Inc., paid $8,600 for a two-year insurance policy—for the current year and for next year.