Question

Richmond Company engaged in the following transactions during 2013:

1. Purchased $160,000 of supplies from ABC Supplies on February 16. Amount due in full on March 31.
2. Paid for 25% of the purchased merchandise (Transaction a) on February 26.
3. On March 31 negotiated a payment extension with ABC for the remainder of the balance from the February 16 purchase by signing a 1-year, 10% note.
4. Borrowed $300,000 on a 10-month, 8% interest-bearing note on April 30.
5. Purchased $78,000 of merchandise on June 4. Amount due in full on June 30.
6. Paid for the purchased merchandise (Transaction e) on June 24.
7. Received from Haywood Inc. on August 19, a $22,000 deposit against a total selling price of $220,000 for services to be performed for Haywood.
8. Paid quarterly installments of Social Security and Medicare and individual income tax withholdings, as shown below, on October 15. The Social Security and Medicare were previously recorded as expenses during the quarter and the amounts paid represent both the employee and employer shares (50% each):
   
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9. On December 15, Richmond completed the services ordered by Haywood on August 19. Haywood's remaining balance of $198,000 is due on January 31.

Prepare journal entries for these transactions and any adjusting entries

Answer 1

Solution 1 Journal entries':- Date Account title Debit Gedet feb 16 160000 Supplies Accounts payable 160000 40000 feb 26 40000 M91 3 120000 Accounts payable cash [160000 x 2504] Accounts payable Note payable ſ160000-40000] Cash Note payable 120000 Apr 30 300000 300000

Jun.4 I 78000 I Merchandise Inventory Accounts payable 78000 Jun 30 Accounts payable 78000 cash 78000 Aug 19 22000 cash unearned service revenue 22000 oct 15 185000 43266 social security taxes poyable Medecare taxes payable Income tax withheld cash 319000 547266 Dec 15 | Accounts receivable 198000 service revenue 198000