Question

Record entries from the transaction and event list provided below in proper journal entry format. NOTE: You are recording entries for the fiscal year 2019 (Jan 1 – Dec 31) and make adjusting entries at year-end. This list must be chronologically organized. Make sure that I can easily identify the journal entry or adjusting journal entry with the related transaction/event. Show your work if the entry requires you to make a calculation (i.e. depreciation, interest expense, etc.).

June

17. Leased additional warehouse space from Leasing Solutions for two years on June 1st due expiration of the previous rental contract. $92,000 cash was paid for the new contract on this date which covers the rental fee for two years. There is no value left in the previous contract. [Adjusting Entry Required]

18. Wage expenses from January 1 – June 30 $530,000. Pay this in full including your beginning balance in wages payable.

19. On June 19th, $95,000 of prepaid insurance was used.

20. On June 26th a customer that previously bought your product on account has filed for bankruptcy. He owed you $62,500. You expect to collect $0.

July

21. Your company issued 1,000, 3.8% bonds (face value of each bond is $1,000) at 101.8250 on July 1st, 2019. The bonds are due on July 1, 2024, with interest payable each January 1 and July 1. The market rate at the time of the bond issuance was 3.4%. Use the effectiveinterest method to calculate both the interest expense and the amortization of the bond discount when each interest payment is made. [Adjusting Entry Required]

August

22. On August 6th , a piece of land that was originally purchased for $1,250,000 was sold for $1,550,000 cash.

23. August 15th , your customers bought 9,000 units of your product at $116.00 per unit. The cost of this product is determined by the method of inventory valuation used by your company. Customers paid you 50% in cash and the remainder was on account.

24. Received on August 25th a $156,000 cash payment from a customer paying on their account.

25. Purchased a Patent (Intangible Asset) for $165,000 on August 1st. The patent will be amortized over a 10 year period on a straight-line basis. [Adjusting Entry Required]

September

26. $122,000 cash was paid for an investment in Company X's marketable securities on September 3rd .

27. On September 12th, a piece of equipment was sold for $650,000 cash. The equipment was originally purchased for $1,100,000. At the time of the sale, it had been depreciated by $235,000.

28. Purchased and used $3,500 worth of fuel for the delivery truck on September 18th .

Answer 1