Question

Ivanhoe Corporation’s trial balance at December 31, 2020, is presented below. All 2020 transactions have been recorded except for the items described below.

		Debit		Credit
Cash		$26,100
Accounts Receivable		59,000
Inventory		23,400
Land		66,800
Buildings		94,000
Equipment		30,000
Allowance for Doubtful Accounts				$400
Accumulated Depreciation—Buildings				29,500
Accumulated Depreciation—Equipment				15,000
Accounts Payable				19,200
Interest Payable				–0–
Dividends Payable				–0–
Unearned Rent Revenue				7,200
Bonds Payable (10%)				46,000
Common Stock ($10 par)				32,000
Paid-in Capital in Excess of Par—Common Stock				6,400
Preferred Stock ($20 par)				–0–
Paid-in Capital in Excess of Par—Preferred Stock				–0–
Retained Earnings				92,900
Treasury Stock		–0–
Cash Dividends		–0–
Sales Revenue				563,000
Rent Revenue				–0–
Bad Debt Expense		–0–
Interest Expense		–0–
Cost of Goods Sold		409,000
Depreciation Expense		–0–
Other Operating Expenses		37,000
Salaries and Wages Expense		66,300
Total		$811,600		$811,600

Unrecorded transactions and adjustments:

1.		On January 1, 2020, Ivanhoe issued 1,000 shares of $20 par, 6% preferred stock for $21,000.
2.		On January 1, 2020, Ivanhoe also issued 1,100 shares of common stock for $25,300.
3.		Ivanhoe reacquired 270 shares of its common stock on July 1, 2020, for $49 per share.
4.		On December 31, 2020, Ivanhoe declared the annual cash dividend on the preferred stock and a $1.40 per share dividend on the outstanding common stock, all payable on January 15, 2021.
5.		Ivanhoe estimates that uncollectible accounts receivable at year-end is $5,900.
6.		The building is being depreciated using the straight-line method over 30 years. The salvage value is $5,500.
7.		The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $3,000.
8.		The unearned rent was collected on October 1, 2020. It was receipt of 4 months’ rent in advance (October 1, 2020 through January 31, 2021).
9.		The 10% bonds payable pay interest every January 1. The interest for the 12 months ended December 31, 2020, has not been paid or recorded.

(Ignore income taxes.)

Prepare journal entries for the transactions and adjustment listed above. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1