Consider each of the five independent situations below.
1. Asia Tea Company purchased a 3-month property insurance policy on March 1 at a cost of 3,600. The insurance became effective immediately although payment was due and paid 45 days later.
2. On February 1, Big Bang Chemical Company signed a contract with a customer. Big Bang agreed to deliver each month, for 3 months, goods priced at 7,500. The first delivery was made on April 1. The customer paid 22,500 for these goods on May 15.
3. Turning Tire Company borrowed 15,000 from a bank on February 1. Terms of repayment are that 1,000 of the principal amount must be repaid on the first day of each following month. In addition, interest at 2% per month on the unpaid balance must accompany each payment.
4. Bureaucrats, Inc. consumes large amounts of office supplies. On February 1, a 10,000 order of supplies was received and paid for. 60% of these supplies were used in March and the rest were used in April. On April 20, a 12,000 order of office supplies was received. The invoice for these goods was paid in May. 30% of these goods were consumed in May and the rest were consumed in June.