Response to the following :
1. On January 1, Tolson Company purchased a building by paying $85,000. The building has an estimated life of 40 years and an estimated residual value of $5,000. Prepare journal entries to record the purchase and the related year-end adjusting entry.
2. On July 1, Friler Company purchased a three-year insurance policy by paying $5,400. Prepare journal entries to record the purchase and the related year-end adjusting entry.