Lynbrook Securities engaged in the following transactions during 2020: 1. Purchased $160,000 of supplies from Scan...

Lynbrook Securities engaged in the following transactions during 2020:

1. Purchased $160,000 of supplies from Scan House Supplies on February 1, terms 2/15, net 30. Use the Net Method to record the purchase.

2. Paid for the purchase of merchandise (Transaction 1) on February 26.

3. On April 1 negotiated a payment extension with Capital Products for a $10,000 Accounts Payable balance by signing a 1-year, 9% note.

4. Borrowed $200,000 on a 9-month, 6% interest-bearing note on May 31.

5. Purchased $78,000 of merchandise on June 4, terms 2/15, net 30. Use the Net Method to record the purchase.

6. Paid for the purchased merchandise (Transaction 5) on June 16.

7. Received from Scan House Inc. on August 20, a $20,000 deposit against a total selling price of $120,000 for services to be performed for Scan House during the 4th quarter of the year.

8. Paid quarterly installments of Social Security and Medicare and individual income tax withholdings, as shown below, on October 15. The Social Security and Medicare were recorded as expenses during the previous quarter ending September 30. The amounts paid represent both the employee and employer shares (50% each): a. Social Security taxes withheld $185,000 b. Medicare taxes withheld 43,266 c. Federal income taxes withheld 319,000

9. On December 10, Lynbrook completed the services ordered by Scan House on August 20. Scan House’s remaining balance of $100,000 is due on January 9. Required:

1. Prepare journal entries for these transactions. 2. Prepare any adjusting journal entries required at December 31, 2020 relating to the above transactions.

Expert Solution

ekkarill92 answered 1 year ago

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