The unadjusted trial balance of Imagine Ltd. at December 31,2014, is as follows:

Additional information:
1. On November I, 2014, Imagine received 510,200 rent from its lessee for a 12-month lease beginning on that date.
This was credited to Rent Revenue.
2. Imagine estimates that 7% of the Accounts Receivable balances on December 31,2014, will be uncollectible. On
December 28, 2014, the bookkeeper incorrectly credited Sales Revenue for a receipt of $1,000 on account. This error had not yet been corrected on December 31.
3. After a physical count, inventory on hand at December 31, 2014, was $77,000.
4. Prepaid insurance contains the premium costs of two policies: Policy A, cost of$1,320, two-year term, taken out on
September 1, 2014; Policy B, cost of $1,620, three-year term, taken out on April 1, 2014.
5. The regular rate of depreciation is I 0% of cost per year. Acquisitions and retirements during a year are depreciated at half this rate. There were no retirements during the year. On December 31, 2013, the balance of Equipment was $90,000.
6. On April I, 2014, Imagine issued at par value 50 $1,000, II% bonds maturing on April I, 2017. Interest is paid on
April I and October 1.
7. On August I, 2014, Imagine purchased at par value 18 $1,000, 12% Legume Inc. bonds, maturing on July 31,
2016. Interest is paid on July 31 and January 31.
8. On May 30, 2014, Imagine rented a warehouse for $1,100 per month and debited Prepaid Rent for an advance payment of $13,200.
9. Imagine; FV-NI investments consist of shares with total market value of $9,400 as of December 31, 2014.
10. T he FV-OCI investment is an investment of 500 shares in Yop Inc., with current market value of $25 per share as of December 31, 2014.
Instructions
(a) Prepare the year-end adjusting and correcting entries for December 31, 2014, using the information given. Record the adjusting entry for inventory using a Cost of Goods Sold account.
(b) Indicate which of the adjusting entries could be reversed.

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Debit Credit $10,850 56,500 Cash Accounts receivable Allowance for doubtful accounts FV-NI investments Inventory Prepaid insurance Prepaid rent FV-OCI investments Bond Investment at Amortized Cost Land Equipment Accumulated depreciation Accounts payable Bonds payable Common shares Retained earnings Sales revenue Rent revenue Purchases Purchase discounts Freight-out Freight-in Salaries and wages expense $ 750 8,600 58,000 2,940 13,200 14,000 18,000 10,000 104,000 18,000 9,310 50,000 100,000 103,260 223,310 10,200 170,000 2,400 9,000 3,500 31,000 Debit Credit Interest expense Miscellaneous expense 6,750 890 $517,230 $517,230