Question

During 2020 ...

A. Purchased $35,000 of merchandise from XY company on January 26. Amount due in full in Feb. 28.

B. Paid for 40% of the purchased merchandise in transaction A on February 26

C. On Feb. 28 negotiated a patent extension from XY company for the remainder of the balance from Jan. 26th’s purchase by signing a 1 yr 8% note payable

D. Borrowed $200,000 on an 8 month 9% linteredt bearing note on July 31st

E. Purchased $140,000 of merchandise on Aug. 2 and the amount is due in full on Sept. 28

F. Paid for the $140,000 purchase of merchandise on Sept. 28

G. Received a $40,000 deposit against a total settling price of $400,000 for service to be performed for Martel by Mattel inc on Oct. 4

H. Paid quarterly installments of social security, Medicare, and individual income tax withholdings on Oct. 10. The social security and Medicare were previously recorded as expenses during the quarter and the amounts paid represent both the employee and employer shares. (50% each).

Social security taxes withheld $280,000

Medicare taxes withheld 65,500

Federal income taxes withheld 720,000

I. On Dec. 15 Daniels completed the services ordered buy Martel on Oct. 4. Martel’s remaining balance of $360,000 is due on January 31.

Prepare journal entries for each transactions and any necessary adjusting entries on Dec. 31 2020.

Answer 1