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Attempt in Progress Sheffield Corporation began operations on January 2. Its year end is December 31, and it adjusts its accounts annually. Selected transactions for the current year follow: 1. On February 2, purchased a $18,600, one-year insurance policy for cash. The policy came into effect on that date. 2. On March 15, Sheffield sold $78,000 in annual subscriptions for cash, with service to begin on April 1. 3. Purchased a delivery drone for $122.000 on July 1. Sheffield paid $31,000 in cash and signed a $91,000 bank loan for the balance. The drone is estimated to have a useful life of four years and the company uses straight-line depreciation. The bank loan has an interest rate of 5%. 4. On November 1, the company purchased six months of digital advertising at a cost of $99,300. Sheffield paid $49,650 cash and the balance on account. The advertising was to commence on December 1 and run at a constant level for six consecutive months. 5. On December 1, Sheffield received $11,100 from the sale of gift cards which could be redeemed for services at a future date. On December 31, it was determined that 60% of the cards had been redeemed.

Attempt in Progress Sheffield Corporation began operations on January 2. Its year end is December 31, and it adjusts its accounts annually. Selected transactions for the current year follow: 1. On February 2, purchased a $18,600, one-year insurance policy for cash. The policy came into effect on that date. 2. On March 15, Sheffield sold $78,000 in annual subscriptions for cash, with service to begin on April 1. 3. Purchased a delivery drone for $122.000 on July 1. Sheffield paid $31,000 in cash and signed a $91,000 bank loan for the balance. The drone is estimated to have a useful life of four years and the company uses straight-line depreciation. The bank loan has an interest rate of 5%. 4. On November 1, the company purchased six months of digital advertising at a cost of $99,300. Sheffield paid $49,650 cash and the balance on account. The advertising was to commence on December 1 and run at a constant level for six consecutive months. 5. On December 1, Sheffield received $11,100 from the sale of gift cards which could be redeemed for services at a future date. On December 31, it was determined that 60% of the cards had been redeemed.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Current Attempt in Progress Sheffield Corporation began operations on January 2. Its year end is December 31, and it adjusts its accounts annually. Selected transactions for the current year follow: 1. On February 2, purchased a $18,600, one-year insurance policy for cash. The policy came into effect on that date. 2. On March 15, Sheffield sold $78,000 in annual subscriptions for cash, with service to begin on April 1. 3. Purchased a delivery drone for $122.000 on July 1. Sheffield paid $31.000 in cash and signed a $91,000 bank loan for the balance. The drone is estimated to have a useful life of four years and the company uses straight-line depreciation. The bank loan has an interest rate of 5% 4. On November 1, the company purchased six months of digital advertising at a cost of $99,300. Sheffield paid $49,650 cash and the balance on account. The advertising was to commence on December 1 and run at a constant level for six consecutive months. 5. On December 1, Sheffield received $11,100 from the sale of gift cards which could be redeemed for services at a future date. On December 31, it was determined that 60% of the cards had been redeemed. (a) For each of the above situations, prepare the journal entry for the initial transaction. (Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)
Transcribed Image Text:Current Attempt in Progress Sheffield Corporation began operations on January 2. Its year end is December 31, and it adjusts its accounts annually. Selected transactions for the current year follow: 1. On February 2, purchased a $18,600, one-year insurance policy for cash. The policy came into effect on that date. 2. On March 15, Sheffield sold $78,000 in annual subscriptions for cash, with service to begin on April 1. 3. Purchased a delivery drone for $122.000 on July 1. Sheffield paid $31.000 in cash and signed a $91,000 bank loan for the balance. The drone is estimated to have a useful life of four years and the company uses straight-line depreciation. The bank loan has an interest rate of 5% 4. On November 1, the company purchased six months of digital advertising at a cost of $99,300. Sheffield paid $49,650 cash and the balance on account. The advertising was to commence on December 1 and run at a constant level for six consecutive months. 5. On December 1, Sheffield received $11,100 from the sale of gift cards which could be redeemed for services at a future date. On December 31, it was determined that 60% of the cards had been redeemed. (a) For each of the above situations, prepare the journal entry for the initial transaction. (Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)
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