Record the following transactions for Krall Pianos, Inc., in T-accounts and tell how each affects assets, liabilities, or shareholders’ equity. The year end for Krall Pianos, Inc., is December 31.

1. On March 1, Krall Pianos issued a $15,000 note at 6%, both interest and principal due in one year.

2. On May 1, Krall Pianos rented a warehouse and paid $6,750 for two years of rent in advance.

3. Krall Pianos purchased an insurance policy for a term of three years on July 1, beginning immediately. The cost was $5,400, paid in cash.

4. The company purchased $475 worth of supplies for cash on November 1. The company started the year with $375 worth of supplies on hand.

5. Over the course of the year, Krall Pianos earned $54,500 for cash sales of $15,000 worth of inventory, collected in cash. The company started the year with $20,000 in inventory.