Fireflies Limited began retail operations on 1/1/2010. On that date, it issued 10,000 shares of $1...

Fireflies Limited began retail operations on 1/1/2010. On that date, it issued 10,000 shares of $1 par value common stock for $50,000. On 1/1/2010, Fireflies also borrowed $20,000 from a local bank. The loan will be due in three years, with 8% interest rate. Fireflies pays interests every quarter. On 1/31, Fireflies used $36,000 of the proceeds to rent a store, paying in advance for the next one year. Fireflies also purchased $12,000 of merchandise on credit, agreeing to pay the supplier within 30 days. Prepare, a balance sheet as of 1/31/2010.

Expert Solution

NOTE:

Interest ia payable quarterly but accruals happen every month and hence need to be provisioned in books monthly.Discharge happens quarterly

JOURNALS:

Ledgers:

Trial Balance

Balance Sheet

ekkarill92 answered 2 years ago

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Fireflies Limited began retail operations on 1/1/2010. On that date, it issued 10,000 shares of $1...

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