Following are the transactions and adjustments that occurred during the first year of operations at Kissick Company. Issued 220,000 shares of $8 - par - value common stock for $1,760,000 in cash. Borrowed $ 550,000 from Oglesby National Bank and signed a 11% note due in three years. Incurred and paid $390,000 in salaries for the year. Purchased $700,000 of merchandise inventory on account during the year. Sold inventory costing $660,000 for a total of $960,000, all on credit. Paid rent of $220,000 on the sales facilities during the first 11 months of the year. Purchased $ 150,000 of store equipment, paying $51,000 in cash and agreeing to pay the difference within 90 days. Paid the entire $99,000 owed for store equipment and $ 600,000 of the amount due to suppliers for credit purchases previously recorded. Incurred and paid utilities expense of $38,000 during the year. Collected $ 875,000 in cash from customers during the year for credit sales previously recorded. At year-end, accrued $ 60, 500 of interest on the note due to Oglesby National Bank. At year-end, accrued $20,000 of past-due December rent on the sales facilities. Required: Record each transaction in the appropriate columns. Indicate the financial statement effect. Prepare the journal entry for the above transactions.
Following are the transactions and adjustments that occurred during the first year of operations at Kissick Company. Issued 220,000 shares of $8 - par - value common stock for $1,760,000 in cash. Borrowed $ 550,000 from Oglesby National Bank and signed a 11% note due in three years. Incurred and paid $390,000 in salaries for the year. Purchased $700,000 of merchandise inventory on account during the year. Sold inventory costing $660,000 for a total of $960,000, all on credit. Paid rent of $220,000 on the sales facilities during the first 11 months of the year. Purchased $ 150,000 of store equipment, paying $51,000 in cash and agreeing to pay the difference within 90 days. Paid the entire $99,000 owed for store equipment and $ 600,000 of the amount due to suppliers for credit purchases previously recorded. Incurred and paid utilities expense of $38,000 during the year. Collected $ 875,000 in cash from customers during the year for credit sales previously recorded. At year-end, accrued $ 60, 500 of interest on the note due to Oglesby National Bank. At year-end, accrued $20,000 of past-due December rent on the sales facilities. Required: Record each transaction in the appropriate columns. Indicate the financial statement effect. Prepare the journal entry for the above transactions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Following are the transactions and adjustments that
occurred during the first year of operations at Kissick
Company. Issued 220,000 shares of $8 - par - value
common stock for $1,760,000 in cash. Borrowed $
550,000 from Oglesby National Bank and signed a 11%
note due in three years. Incurred and paid $390,000 in
salaries for the year. Purchased $700,000 of
merchandise inventory on account during the year. Sold
inventory costing $660,000 for a total of $960,000, all
on credit. Paid rent of $220,000 on the sales facilities
during the first 11 months of the year. Purchased $
150,000 of store equipment, paying $51,000 in cash
and agreeing to pay the difference within 90 days. Paid
the entire $99,000 owed for store equipment and $
600,000 of the amount due to suppliers for credit
purchases previously recorded. Incurred and paid
utilities expense of $38,000 during the year. Collected $
875,000 in cash from customers during the year for
credit sales previously recorded. At year - end, accrued $
60,500 of interest on the note due to Oglesby National
Bank. At year end, accrued $20,000 of past-due
December rent on the sales facilities. Required: Record
each transaction in the appropriate columns. Indicate
the financial statement effect. Prepare the journal entry
for the above transactions.
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