**Journal Entry Review Test - Educational Reference** --- **11.** On November 14, your company declared dividends of $7,000,000 to be paid on January 19 of the next year. Prepare the appropriate journal entry for November. --- **12.** Megan Rubber and Tire Company sells passenger car tires and uses a perpetual inventory system. On August 31, it purchased $50,000 worth of tires (from Louisiana Tire Sales) and the terms were 2/10 n 30. Prepare the appropriate journal to record the purchase of these tires. | **Debit** | **Credit** | |---------------------------|-------------------------| | Cash | | | Sales Revenue | | | C.O.G.S. | | | Merchandise Inventory | | --- **13.** Assume the facts in Problem 12. The company paid the invoice on September 2. --- **14.** Assume the facts in Problem 12. Prepare the appropriate journal entry for Louisiana Tire Sales that pertain to August 31. Hint: You are the seller. --- **15.** Assume the facts in Problem 13. Prepare the appropriate journal entry. Hint: You are the seller. | **Debit** | **Credit** | |---------------------------|-------------------------| | Cash | | | Sales Revenue | | --- ### Explanation: Each point involves preparing journal entries for specific business transactions related to sales and inventory purchases using a perpetual inventory system. Key components include recording transactions such as declared dividends and invoicing, alongside the purchase and sale of inventory items. ### Journal Entry Examples for Financial Transactions --- #### Example 7: **Scenario:** On May 16, an architect was given $1,500 to draft house plans. The plans will be drawn up sometime in July. Below is the journal entry for May. **Journal Entry:** | Date | Account | Debit | Credit | |------------|------------------------|--------|---------| | March 16th | Prepaid architect fees | $1,500 | | | | Cash | | $1,500 | | | *(Being architect fees paid in advance of $1,500)* | | | | **Total** | | $1,500 | $1,500 | --- #### Example 8: **Scenario:** Assume the facts in problem 7. In July, the architect drew up the plans and delivered them to the client. Prepare the appropriate adjusting journal entry for July. * (Note: The response in the image does not contain the completed journal entry for July.) --- #### Example 9: **Scenario:** You are a financial planner. In July, you drafted a financial plan for $2,800 and delivered it to the client. Since you know the client well and she has good credit, you will accept full payment in August. Prepare the appropriate entry for July. * (Note: The response in the image does not contain the completed entry for July.) --- #### Example 10: **Scenario:** Your company issued bonds several years ago (borrowed money) and interest payments of $600 are made twice a year on July 1 and January 1. Prepare the appropriate journal (adjusting journal entry) entry for the month of February 2007 to recognize one month of interest expense. * (Note: The response in the image does not contain the completed journal entry for February 2007.) --- *This detailed explanation is designed for educational purposes, illustrating the method of recording financial transactions in journal entries.*