Question

Elliott and Company had the following transactions during 2018: November 1 Borrowed $18,000 from the First National Bank by signing a 120 day. 107 notes November 2 Paid vendors 55.000 representing amounts due on Count from October purchases. November 3 Collected $20,000 in cash from a customer Tech Works) representing an advance on services to be performed in December and January. November 12 Shipped merchandise and billed customers $18.900 which included 8% sales tax. (Ignore COGS/Inventory) December 31 It was determined that 50% of the services have been completed to Tech Works (see Nov advance) December 31 Recorded adjusting entry related to November 1 Note. Provide the appropriate journal entries below. Date Titles Debit Credit

Answer 1

Date	Account Title	Debit	Credit
Nov 1	Cash	$18,000
	Notes Payable		$18,000
	(To record borrowing from bank)
Nov 2	Accounts Payable	$5,000
	Cash		$5,000
	(To record payment to vendor)
Nov 3	Cash	$20,000
	Deferred Service Revenue		$20,000
	(To record advance received)
Nov 12	Accounts Receivable	$18,900
	Sales [$18900/108% x 100%]		$17,500
	Sales Tax Payable [$18900/108% x 8%]		$1,400
	(To record sales)
Dec 31	Deferred Service Revenue	$10,000
	Service Revenue		$10,000
	(To record service revenue)
Dec 31	Interest Expense [($18000 x 10%)/360 x 61]	$305
	Interest Payable		305
	(To record interest expense)