Give journal entries for the following: On February 1, Your Company’s board authorized 250,000 shares and issued 12,200 shares of $1 par common stock for $170,800 cash. On February 1, Your Company received $142,500 as prepayment for 15 months of consulting services that will be provided evenly over the contract, beginning in October. On March 1, Your Company paid $36,000 in cash as prepayment for 1 year of rent on an office building, beginning in March. On May 1, Your Company’s board authorized 200,000 shares of $50 par, cumulative preferred stock with a 4% coupon rate. It issued 2,000 shares for $100,000 On June 1, Your Company purchased merchandise inventory costing $350,000 on credit, 2/10,n/30. Your Company paid for the inventory on day seven. Your Company repurchased 450 shares of its own common stock from an unhappy shareholder for $15 per share. Your Company sold $85,000 of its inventory for $150,000 on account, terms 2/10, net 30. (Several customers) On December 1, Your Company paid $4,000 for cleaning services for December. Your Company collected $95,000 of its accounts receivable. All of the customers received the discount. On December 31, Your Company recorded $8,000 of salary expense. The employees will be paid on January 15, 2023. Record the year-end entry to recognize service income relating to entry 2. Record the year-end entry to recognize rent expense relating to entry 3. Record the warranty expense. Your Company estimates that this expense will be 5 percent of its cost of goods sold. Record the bad debt expense. Your Company estimates that 3 percent of its credit sales will not be collected.

Give journal entries for the following: On February 1, Your Company’s board authorized 250,000 shares and issued 12,200 shares of $1 par common stock for $170,800 cash. On February 1, Your Company received $142,500 as prepayment for 15 months of consulting services that will be provided evenly over the contract, beginning in October. On March 1, Your Company paid $36,000 in cash as prepayment for 1 year of rent on an office building, beginning in March. On May 1, Your Company’s board authorized 200,000 shares of $50 par, cumulative preferred stock with a 4% coupon rate. It issued 2,000 shares for $100,000 On June 1, Your Company purchased merchandise inventory costing $350,000 on credit, 2/10,n/30. Your Company paid for the inventory on day seven. Your Company repurchased 450 shares of its own common stock from an unhappy shareholder for $15 per share. Your Company sold $85,000 of its inventory for $150,000 on account, terms 2/10, net 30. (Several customers) On December 1, Your Company paid $4,000 for cleaning services for December. Your Company collected $95,000 of its accounts receivable. All of the customers received the discount. On December 31, Your Company recorded $8,000 of salary expense. The employees will be paid on January 15, 2023. Record the year-end entry to recognize service income relating to entry 2. Record the year-end entry to recognize rent expense relating to entry 3. Record the warranty expense. Your Company estimates that this expense will be 5 percent of its cost of goods sold. Record the bad debt expense. Your Company estimates that 3 percent of its credit sales will not be collected.

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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Give journal entries for the following:

On February 1, Your Company’s board authorized 250,000 shares and issued 12,200 shares of $1 par common stock for $170,800 cash.

On February 1, Your Company received $142,500 as prepayment for 15 months of consulting services that will be provided evenly over the contract, beginning in October.

On March 1, Your Company paid $36,000 in cash as prepayment for 1 year of rent on an office building, beginning in March.

On May 1, Your Company’s board authorized 200,000 shares of $50 par, cumulative preferred stock with a 4% coupon rate. It issued 2,000 shares for $100,000

On June 1, Your Company purchased merchandise inventory costing $350,000 on credit, 2/10,n/30.

Your Company paid for the inventory on day seven.

Your Company repurchased 450 shares of its own common stock from an unhappy shareholder for $15 per share.

Your Company sold $85,000 of its inventory for $150,000 on account, terms 2/10, net 30. (Several customers)

On December 1, Your Company paid $4,000 for cleaning services for December.

Your Company collected $95,000 of its accounts receivable. All of the customers received the discount.

On December 31, Your Company recorded $8,000 of salary expense. The employees will be paid on January 15, 2023.

Record the year-end entry to recognize service income relating to entry 2.

Record the year-end entry to recognize rent expense relating to entry 3.

Record the warranty expense. Your Company estimates that this expense will be 5 percent of its cost of goods sold.

Record the bad debt expense. Your Company estimates that 3 percent of its credit sales will not be collected.

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