In: Accounting
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.).
January
On January 1st, the company issued 280,000 additional shares (par of $.25) to raise capital for the New Year. Assume no change in price from Dec 31, 2018.
Purchased a truck for $140,000 cash on the 1st of January. The truck will be depreciated over an 8 year period. You decide to use the 200% declining-balance depreciation method because it is determined that the truck will be more productive when it is newer. The truck has an estimated salvage value of $8,000.
[Adjusting Entry Required]
On January 1st, a 5 year, $130,000 long-term note payable was taken from a local bank.
On January 5th, you receive payment from interest earned and accrued in 2018.
On January 22nd you purchased 8,500 additional units of inventory at a cost of $63.00 per unit. You paid 45% in cash and purchased the remainder on account.
On January 25th you pay $112,000 cash toward your accounts payable.
Purchased new office equipment for $230,000 with cash from
California Furniture on January 1, 2019. The new furniture will be
depreciated over a ten-year period on a straight- line basis. The
cabinet has an estimated salvage value of $15,000.
[Adjusting Entry Required]
February
Paid cash for $160,000 worth of radio advertising on February
1st. This gives you radio advertising until January 31st,
2020.
[Adjusting Entry Required]
February 13th you collect $365,000 of account payments from customers.
Journal Entries | ||||||
Date | Particulars | Debit | Credit | |||
1-Jan | Cash | $ 70,000.00 | ||||
To Common stock | $ 70,000.00 | |||||
(280000 x $ 0.25) | ||||||
1-Jan | Truck | $ 140,000.00 | ||||
To Cash | $ 140,000.00 | |||||
1-Jan | Office Equipment | $ 230,000.00 | ||||
To Cash | $ 230,000.00 | |||||
1-Jan | Cash | $ 130,000.00 | ||||
To Notes Payable | $ 130,000.00 | |||||
5-Jan | Cash | |||||
To Interest Receivable | ||||||
(Note) | ||||||
22-Jan | Inventory | $ 535,500.00 | (8500 x $ 63) | |||
To Cash | $ 240,975.00 | ($ 535500 x 45%) | ||||
To Accounts Payable | $ 294,525.00 | (bal. fig) | ||||
25-Jan | Accounts Payable | $ 112,000.00 | ||||
To Cash | $ 112,000.00 | |||||
1-Feb | Prepaid Advertising | $ 160,000.00 | ||||
To Cash | $ 160,000.00 | |||||
13-Feb | Cash | $ 365,000.00 | ||||
To Accounts Receivable | $ 365,000.00 |
Adjusting Entries | |||||
Date | Particulars | Debit | Credit | ||
31-Dec | Depreciation on Truck | $ 35,000.00 | |||
To Accumulated Depreciation | $ 35,000.00 | ||||
[(100% / 8 years) x 200% x $ 140000] | |||||
31-Dec | Depreciation on Equipment | $ 21,500.00 | |||
To Accumulated Depreciation | $ 21,500.00 | ||||
[($ 230000 - $ 15000) / 10 years] | |||||
31-Dec | Advertisement Expense | $ 146,666.67 | |||
To Prepaid Advertising | $ 146,666.67 | ||||
($ 160000 x 11/12) |
Note: | |
No information regarding Interest Receivable has been provided, though the | |
entry would be this only. |