Question

Oriole Corporation’s trial balance at December 31, 2020, is presented below. All 2020 transactions have been recorded except for the items described below. Debit Credit Cash $26,500 Accounts Receivable 54,000 Inventory 22,700 Land 67,100 Buildings 91,300 Equipment 30,000 Allowance for Doubtful Accounts $500 Accumulated Depreciation—Buildings 28,500 Accumulated Depreciation—Equipment 12,600 Accounts Payable 19,000 Interest Payable –0– Dividends Payable –0– Unearned Rent Revenue 6,800 Bonds Payable (10%) 46,000 Common Stock ($10 par) 29,000 Paid-in Capital in Excess of Par—Common Stock 5,800 Preferred Stock ($20 par) –0– Paid-in Capital in Excess of Par—Preferred Stock –0– Retained Earnings 28,900 Treasury Stock –0– Cash Dividends –0– Sales Revenue 606,000 Rent Revenue –0– Bad Debt Expense –0– Interest Expense –0– Cost of Goods Sold 390,000 Depreciation Expense –0– Other Operating Expenses 37,500 Salaries and Wages Expense 64,000       Total $783,100 $783,100 Unrecorded transactions and adjustments: 1. On January 1, 2020, Oriole issued 1,200 shares of $20 par, 6% preferred stock for $27,600. 2. On January 1, 2020, Oriole also issued 1,200 shares of common stock for $30,000. 3. Oriole reacquired 250 shares of its common stock on July 1, 2020, for $47 per share. 4. On December 31, 2020, Oriole declared the annual cash dividend on the preferred stock and a $1.20 per share dividend on the outstanding common stock, all payable on January 15, 2021. 5. Oriole estimates that uncollectible accounts receivable at year-end is $5,400. 6. The building is being depreciated using the straight-line method over 30 years. The salvage value is $5,800. 7. The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $3,000. 8. The unearned rent was collected on October 1, 2020. It was receipt of 4 months’ rent in advance (October 1, 2020 through January 31, 2021). 9. The 10% bonds payable pay interest every January 1. The interest for the 12 months ended December 31, 2020, has not been paid or recorded. (Ignore income taxes.)

Prepare journal entries for the transactions and adjustment listed above. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. 2. 3. 4. 5. 6. 7. 8. 9.

Prepare an updated December 31, 2020, trial balance, reflecting the journal entries in part(a).

Answer 1

Journal Entry- Oriole Corporation
S. No.	Account Titles and Explanation	Debit	Credit
1	Cash	$27,600.00
	Preferred Stock (1200*20)		$24,000.00
	Paid-in Capital in Excess of Par—Preferred Stock		$3,600.00
2	Cash	$30,000.00
	Common Stock ($10 parX 1200)		$12,000.00
	Paid-in Capital in Excess of Par—Common Stock		$18,000.00
3	Treasury Stock (250X47)	$11,750.00
	Cash		$11,750.00
4	Cash Dividends{ (2900+1200-250)X1.20}+ (1200X20*6%)	$6,060.00
	Dividends Payable		$6,060.00
5	Bad Debts Expenses	$5,400.00
	Allowance for doubtful account		$5,400.00
6	Depreciation Expense (91300-5800)/30	$2,850.00
	Accumulated Depreciation—Buildings		$2,850.00
7	Depreciation Expense (30000-3000)/10	$2,700.00
	Accumulated Depreciation—Equipment		$2,700.00
8	Unearned Rent Revenue (6800/4*3)	$5,100.00
	Rent Revenue		$5,100.00
9	Interest Expenses	$4,600.00
	Interest payable		$4,600.00
	2. Adjusted Trial Balance
		Debit	Credit
	Cash (26500+27600+30000-11750)	$72,350.00
	Accounts Receivable	$54,000.00
	Inventory	$22,700.00
	Land	$67,100.00
	Buildings	$91,300.00
	Equipment	$30,000.00
	Allowance for Doubtful Accounts		$5,900.00
	Accumulated Depreciation—Buildings		$31,350.00
	Accumulated Depreciation—Equipment		$15,300.00
	Accounts Payable		$19,000.00
	Interest Payable		$4,600.00
	Dividends Payable		$6,060.00
	Unearned Rent Revenue (6800-5100)		$1,700.00
	Bonds Payable (10%)		$46,000.00
	Common Stock ($10 par)		$41,000.00
	Paid-in Capital in Excess of Par—Common Stock		$23,800.00
	Preferred Stock ($20 par)		$24,000.00
	Paid-in Capital in Excess of Par—Preferred Stock		$3,600.00
	Retained Earnings		$28,900.00
	Treasury Stock	$11,750.00
	Cash Dividends	$6,060.00
	Sales Revenue		$606,000.00
	Rent Revenue		$5,100.00
	Bad Debt Expense	$5,400.00
	Interest Expense	$4,600.00
	Cost of Goods Sold	$390,000.00
	Depreciation Expense	$5,550.00
	Other Operating Expenses	$37,500.00
	Salaries and Wages Expense	$64,000.00
	Total	$862,310.00	$862,310.00