Question

Blackberry Mountain Inc began business on January 1, 2020. The following transactions occurred during the month of January.
1 Company issued common stock for $21,000
2a Supplies are purchased for $3,000.
2b Insurance is paid for 6 months beginning January 1: $5,400 (record as an asset)
2c Rent is paid for 3 months beginning in January: $4,500 (record as an asset)
3 Blackberry Mountain Inc borrows $45,000 from 1st State Bank (due in the year 2025) at 12%
annual interest.
6 An equipment is purchased for $22,500 cash. It will be used for 3 years and will be depreciated
monthly using straight-line depreciation with no salvage value. A full month of depreciation will
be charged in January.
9 Services are performed for customers on account. Invoices totaling $9,800 are mailed. 10 Services are performed for cash customers: $7,600.
15 Blackberry Mountain Inc borrows $16,000 from 2nd State Bank (due in the year 2030) at 9%
annual interest.
16 Wages for the first half of the month are paid on January 16: $4,200
20 The company receives $3,000 from a customer for an advance order for services to be provided in
January and February.
25 Collections from customers on account (see January 9 transaction): $4,500. 30 A $3,100 utility bill for January arrived. It is due on February 15.
Additional information for the adjusting entries at January 31:
a. The company completed 60% of the deliveries for the customer that paid in advance on January 20th.
b. Interest is accrued for the two bank loans (assume a full month for the 1st State Bank loan and 1⁄2 month for the 2nd State Bank loan).
c. The last 2 weeks wages earned by employees are $4,200 and will be paid on February 3rd. d. Record January depreciation.
e. Adjust the prepaid asset accounts as needed.
f. Supplies of $ 2500 were still available on January 31.
Instructions
1. Prepare journal entries for each event. 2. Prepare the t-accounts
3. Prepare unadjusted Trial Balance.
4. Record Adjusting Entries.
5. Prepare Adjusting Trial Balance.
6. Prepare Income Statement, Balance sheet, and Statement of Retained Earnings.

Answer 1