Exercise 2 - Classifying and recording adjusting entries: Below are eight transactions that occurred in Adi Inc. during 2017. Adi Inc.'s fiscal period ends on October 31. Adi Inc. is in the business of renting accounting textbooks to students. (1) Prepaid insurance $50,000, in cash, on August 1, 2017 for one year. The insurance policy became effective on the payment date. (2) Received a S1,300 utility bill for October 2017. The bill was paid in November 2017. (3) A customer paid $60 on September 1, 2017 to rent an accounting textbook for the period (4) Took a one-year loan at the amount of $10,000 on May 1, 2017, Interest rate is 10%. The loan (5) Employee salaries at the amount of $750 for the last 2 weeks of October were paid on November (6) Another customer rented an accounting textbook on September 1, 2017 for one year because he September 1, 2017 to November 30, 2017. and the interest will be paid at the end of the loan term. 1,2017. expects to enjoy the course so much that he plans to take it twice. The rental fee of $120 will be paid at the end of the rental period. 2017 was $1,500. and interest were paid at the end of the loan term on July 31,2017. (7) Adi Inc. uses a forklift in its warehouse. The forklift cost is $30,000. Depreciation expense during (8) **Hard** Adi Inc. took a $7,000 one-year loan on August l, 2016, Interest rate is 12%. The loan Required: (a) Record for each transaction whether it is (1) an accrued expense, (2) accrued revenue, (3) deferred expense, or (4) deferred revenue. (b) Show the adjusting entries Adi. Inc. recorded on October, 31, 2017 to account for the transactions above