Question

On January 1, 2021, the general ledger of Freedom Fireworks includes the following account balances:

Accounts	Debit				Credit
Cash	$	101,500
Accounts Receivable		34,600
Inventory		152,300
Land		70,300
Buildings		123,000
Allowance for Uncollectible Accounts					$	2,100
Accumulated Depreciation						9,900
Accounts Payable						21,000
Bonds Payable						123,000
Discount on Bonds Payable		30,300
Common Stock						203,000
Retained Earnings						153,000
Totals	$	512,000			$	512,000

During January 2021, the following transactions occurred:

January		1		Borrowed $103,000 from Captive Credit Corporation. The installment note bears interest at 6% annually and matures in 5 years. Payments of $1,991.28 are required at the end of each month for 60 months.
January		1		Called the bonds at the contractual call price of $103,000. The 5% bonds pay interest semiannually each June 30 and December 31.
January		4		Received $31,300 from customers on accounts receivable.
January		10		Paid cash on accounts payable, $14,000.
January		15		Paid cash for salaries, $29,200.
January		30		Firework sales for the month totaled $195,600. Sales included $65,300 for cash and $130,300 on account. The cost of the units sold was $114,000.
January		31		Paid the first monthly installment of $1,991 related to the $103,000 borrowed on January 1. Round your interest calculation to the nearest dollar.

The following information is available on January 31, 2021.

1. Depreciation on the building for the month of January is calculated using the straight-line method. At the time the building was purchased, the company estimated a service life of 10 years and a residual value of $24,600.
2. At the end of January, $3,300 of accounts receivable are past due, and the company estimates that 50% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 2% will not be collected. No accounts were written off as uncollectible in January.
3. Unpaid salaries at the end of January are $26,400.
4. Accrued income taxes at the end of January are $5,300.

Prepare the journal entries for transactions. (If no entry is required for a particular transaction/event, select "No journal entry required" in the first account field.)

1.)Borrowed $103,000 from Captive Credit Corporation. The installment note bears interest at 6% annually and matures in 5 years. Payments of $1,991 are required at the end of each month for 60 months.

2.) Called the bonds at the contractual call price of $103,000. The 5% bonds pay interest semiannually each June 30 and December 31.

Answer 1

Freedom Fireworks - Journal Entries
	Details	Debit($)	Credit($)
Jan 1	cash	1,03,000
	Notes Payable		1,03,000
	( borrow $ 105000 from capital credit
	Corporation . The instalment bear
	Interest @6% yearly and payment in 5 years
	At the end of each month payment $ 1,991.28 for 60 months
Jan 4	Cash	31,300
	Account Receivable		31,300
	( Cash Received from Debtors)
Jan 10	Account Payable	14,000
	Cash		14,000
	( Amount paid - Account payable)
Jan 15	Salary Expense	29,200
	Cash		29,200
Jan 30	Cash	65,300
	Account Receivable	1,30,300
	Sales		1,95,600
	( accounted Sales ..
	Cost of Goods Sold	1,14,000
	Inventory		1,14,000
	( accounted cost of goods sold)
Jan 31	Interest	515
	Account Payable	1,476.28
	Cash		1,991.28
	Interest =$ 103000*6%*1/12)=$525

Adjusting Entries:-

Depreciation Entry
Need to use depreciation - Straight Line basis
Estimated service Year- 10 year
Residual value $ 24,600

Need to calculate yearly depreciation		Amount
	Building	1,23,000
	Less- Residual value	24,600
	Net Building position	98,400
	Depreciation per year($98,400/10)	9,840
	Depreciation per Month ($9,840/12)	820

Details	Debit($)	Credit($)
Jan 31	Depreciation -Building	820
	Accumulated Depreciation-Building		820

Account Receivable Balance
	Debit($)		Credit($)
To Opening Bal.	34,600	Cash	31,300
Sales	130,300	Closing Bal.	1,33,600
	1,64,900		1,64,900

Closing Account Balance $	1,33,600
Less - past due amount $	3,300
Balance amount $	1,30,300
2% Of $ 130300- Estimate not collectable $	2,606
50% of of $ 3300 not collectable $	1,650
Total Estimated doubtful$	4,256
Allowance for Uncollectible A/C	2,100
Entry to pass	2,156

Jan 31	Details	Debit($)	Credit($)
	Bad Debt	2,156
	Allowance for Uncollectible A/C		2,156
Jan 31	Salary Expenses	26,400
	Salary payable		26,400
	( accounted Salary Payable )
Jan 31	Income Tax expenses	5,300
	Income Tax Payable		5,300

Kindly give me a ?.It helps me. Thanks!!