Ouellette Corporation began operations on January 2. Its year end is December 31, and it adjusts its accounts annually. Selected transactions for the current year follow:

1. On January 2, purchased supplies for $4,100 cash. A physical count at December 31 revealed that $700 of supplies were still on hand.

2. Purchased a vehicle for $45,000 cash on April 1. The vehicle is estimated to have a useful life of five years.

3. Purchased a $3,780, one-year insurance policy for cash on August 1. The policy came into effect on that date.

4. Received a $1,600 advance cash payment from a client on November 9 for services to be provided in the future. As at December 31, half of these services had been completed.

5. On December 1, the company rented out excess office space for a six-month period starting on December 1 and received rent for the months of December and January amounting to $2,000 on this date.

Instructions

(a) For each of the above situations, prepare the journal entry for the original transaction.

(b) For each of the above situations, prepare any adjusting entry required at December 31.