Question

Instructions: You must turn in the work performed on the sheets printed with this page. This WILL NOT BE ACCEPTED ON PLAIN PAPER • 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. Fello 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.) 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 14. 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. YOU MUST INCLUDE ALL PAGES OF THIS DOCUMENT IN YOUR ASSIGNMENT SUBMISSION SUBMIT AS ONE PDF DOCUMENT.

Answer 1

Journal entries as follows: Account Title and Explanations Debit Credit Date December 1,2017 $300,000 Building LT mortgage payable (To record purchased of building on loan) $300,000 December 25,2017 $6,000 Cash Common Stock ($1.5*1000 shares) Paid in capital in excess of par-Common stock (To record shares issued at premium) $1,500 $4,500 December 29,2017 Dividend $231,000 Dividend payable (77000 shares x $3 per share) (To record cash dividend declared on common stock) $231,000 December 31,2017 $3,800 LT Mortgage payable Cash (To record cash instalment paid) $3,800

December 31,2017 $2,000 Interest Expense LT Mortgage payable (To record Interest on LT mortgage at 8%) $2,000 December 31,2017 $200 Interest Expense Interest Payable ($15000*8%*2/12) $200 December 31,2017 $18,147 $1,853 Interest expense (See working) Premium on bonds payable Cash (To record interest and amortization on bond) $20.000 December 31.2017 $10,000 Unearned revenue Sales revenue (To record transfer amount) $10,000 December 31,2017 Preferred Stock (50 shares x $5) Paid in capital in Excess of par [50x(11-5)] Treasury stock $250 $300 | $550

Working note: Value of bond on January 1, 2017 Add: Premium on bond payable Amount $200.000 $26,840 $226,840 8% $18,147 Effective Interest rate Interest expense to be recorded ($226840*8%) Interest payable (S200000*10%) Premium account to be debited ($20000-S18147) $20.000 $1,853