Question

I tried to do this but the balance sheet didn't balance.

Carlsbad Mountain Company Trial Balance 11/30/17 Dr Cr 172,000 124,000 1,000 50,000 55,000 62,000 75,000 0 32,000 90,000 12,000 20,000 18,750 Cash Accounts Receivable Allowance for Doubtful Accounts Short Term Note Receivable Supplies | Inventory Equipment Building Accumulated Depreciation Copyright Accounts Payable Dividends Payable Interest Payable Unearned Revenue ST Note Payable LT Mortgage Payable Bonds Payable Premium on Bonds Payable Common Stock - $1.25 par Paid In Capital In Excess of Par-CS Preferred Stock - $5 par Paid In Capital In Excess of Par-PS Treasury Stock Retained Earnings Dividends Sales Revenue Sales Returns & Allowances Sales Discounts Cost of Goods Sold Bad Debts Expense Depreciation Expense Wages Expense Rent Expense Insurance Expense Supplies Expense Interest Revenue Interest Expense Gain on Sale of Equipment Income Tax Expense Total 250,000 26,840 95,000 86,000 1,000 50,000 3,500 2,000 443,910 7,000 3,000 46,000 5,000 16,000 157,500 98,000 25,000 16,000 1,000 6,500 15,000 46,000 1,056,000 1,056,000

• Write the journal entries (on the following General Journal page) required for each of the events described below. Write the entries in the order described below (#1 - #8).
• Use ONLY the accounts listed on the trial balance for your journal entries.
• Post the transactions to individual T-accounts and prepare an adjusted trial balance for your assigned company from page one as of December 31, 2017.

1. The company purchased a building December 1, 2017 with a LT Mortgage Payable of $300,000 at 8% interest. (Record the purchase of the building.)
2. The company issued 1,000 shares of Common Stock for $6,000 on December 25, 2017.
3. On December 29, 2017 the company declared a cash dividend of $3.00 per share for common stock on the shares issued and declared (including the additional 1,000 shares issued on December 25^th.)
4. The terms of the LT mortgage payable from #1 above require the company to make monthly installment payments over the term of the loan. Each payment consists of interest on the unpaid balance of the loan and a reduction of loan principal. Record the first monthly payment of $3,800 on the LT Mortgage Payable on December 31, 2017.
5. The company last paid interest on the ST note payable on November 1, 2017.   Record the accrued interest expense for the last 2 months of 2017. The annual interest rate is 8%. Round to nearest whole dollar.
6. The Bonds Payable and related Premium amounts on the Nov. trial balance relate to the Jan. 1, 2017 issuance of the following bonds: On Jan. 1, 2017, the company issued 10%, 10-year bonds when the market rate for similar investments was 8%. The company pays interest each year on January 1^st. On Dec. 31, 2017, use the effective interest method of amortizing the premium on bonds payable to accrue the interest expense for 2017. Round your interest expense calculation to the nearest whole dollar.
7. The Unearned Revenue amount on the Nov. trial balance relates to amounts that the company previously collected in cash for sales that were to be completed in the future. The company completed some of these sales during December and now owes only $10,000 of that unearned revenue. Record the necessary adjustment for December 31, 2017.
8. On December 31, 2017, the company purchased 50 shares of its own Preferred Stock for Treasury Stock for $11 per share.

Answer 1

Credit Debit 300,000 Date Account title & explanation 1-Dec Building LT Mortgage Payable (To record purchase of building) 300,000 6,000 79 25-Dec Cash (1000 *6) Common Stock (1000 *1.25) Paid in Capital in excess of Par-CS (To record issue of Common Stock) 1,250 4,750 231,000 29-Dec Cash Dividend (95000 /1.25)=(76000 +1000)*3 Dividend Payable (To record declaration of dividend) 231,000 87 2,000 1,800 31-Dec Interest Expense (300000 *8%*1/12) LT Mortgage Payable Cash (To record first Payment) 3,800 92 250 31-Dec Interest Expense (18750*8%*2/12) Interest Payable (To record accrued interest expense) 250 94

96 97 2,853 22,147 31-Dec Premium on Bonds Payable Interest expense Interest Payable (To record accrued interest expense) 98 25,000 99 100 101 Date Cash paid @10% of Par Value Interest Expense Carrying Value Amortization of premium Unamortized Premium 102 103 104 105 106 2017 2018 2,853 26,840 23,987 25,899 276,840 273,987 25,000 22,147 2,853 10,000 31-Dec Unearned Revenue Sales Revenue (To record revenue earned) 108 109 10,000 550 31-Dec Treasury Stock Cash (To record purchase of Treasury stock) 112 113 550 114

Answer 2

Account title & explanation Debit Credit Date 73 1-Dec Building 74 300,000 LT Mortgage Payable (To record purchase of building) 300,000 75 76 77 25-Dec Cash (1000 *6) 6,000 78 Common Stock (1000 *1.25) 79 1,250 Paid in Capital in excess of Par -CS 80 4,750 (To record issue of Common Stock) 81 82 29-Dec Cash Dividend (95000/1.25) = (76000 +1000) 3 Dividend Payable 83 231,000 84 231,000 (To record declaration of dividend) 85 86 31-Dec Interest Expense (300000 *8%*1/12) LT Mortgage Payable 87 2,000 88 1,800 Cash 89 3,800 (To record first Payment) 90 91. 31-Dec Interest Expense (18750*8%*2/12) Interest Payable 92 250 93 250 (To record accrued interest expense) 94 95

31-Dec Premium on Bonds Payable 96 2,853 Interest expense 97 22,147 Interest Payable 98 25,000 (To record accrued interest expense) 99 100 Cash paid @10% of Par Value Interest Expense Amortization Unamortized Date Carrying Value 101 of premium 102 Premium 103 26,840 104 276,840 2017 22,147 105 2018 25,000 23,987 2,853 273,987 106 31-Dec Unearned Revenue 107 10,000 108 Sales Revenue 10,000 (To record revenue earned) 109 110 31-Dec Treasury Stock 111 550 Cash 112 550 113 (To record purchase of Treasury stock) 114