Question

For Stillwater Sports, assume a December 31 year end, and make the appropriate journal entries. If a reversing entry is required, please record it with a January 1 date. 1. Stillwater paid $2,400 for a two-year insurance policy on April 1 and recorded it as a debit to an asset account. 2. Stillwater leased a portion of its building to a fitness instructor and collected $12,000 in advance rent on August 1. The lease is for one year. Stillwater's bookkeeper credited the payment to a rental revenue account. 3. Stillwater purchased $1,450 in office supplies and recorded them as an asset. At December 31, there were $305 in supplies on hand. 4. Stillwater purchased office equipment on May 1. The cost was $9,600 with a salvage value of $600. The useful life is estimated at 6 years. 5. Stillwater borrowed $50,000 from Tulsa National Bank on August 1. The note has an interest rate of 9% and is due on July 31 of the following year. 6. Stillwater loaned $20,000 to Eskimo Joe on November 1. The interest rate is 14% and the note is due on May 1 of the following year.

Answer 1