RunHeavy Corporation (RHC) is a corporation that manages a local rock band. RHC was formed withan investment of $10,000 cash, paid in by the leader of the band on January 3 in exchange for commonstock. On January 4, RHC purchased music equipment by paying $2,000 cash and signing an $8,000promissory note payable in three years. On January 5, RHC booked the band for six concert events, ata price of $2,500 each. Of the six events, four were completed between January 10 and 20. On January22, cash was collected for three of the four events. The other two bookings were for February concerts,but on January 24, RHC collected half of the $2,500 fee for one of them. On January 27, RHC paid$3,140 cash for the band’s travel-related costs. On January 28, RHC paid its band members a total of$2,400 cash for salaries and wages for the first three events. As of January 31, the band members hadn’tyet been paid wages for the fourth event completed in January, but they would be paid in February at thesame rate as for the first three events. As of January 31, RHC has not yet recorded the $100 of monthlydepreciation on the equipment. Also, RHC has not yet paid or recorded the $60 interest owed on thepromissory note at January 31. RHC is subject to a 15% tax rate on the company’s income before tax.Required:1. Prepare journal entries to record the transactions and adjustments needed on each of the datesindicated above.2. Post the journal entries from requirement 1 to T-accounts, calculate ending balances, and prepare an adjusted trial balance.3. Prepare a classified balance sheet and income statement as of and for the month ended January 31
RunHeavy Corporation (RHC) is a corporation that manages a local rock band. RHC was formed with
an investment of $10,000 cash, paid in by the leader of the band on January 3 in exchange for common
stock. On January 4, RHC purchased music equipment by paying $2,000 cash and signing an $8,000
promissory note payable in three years. On January 5, RHC booked the band for six concert events, at
a price of $2,500 each. Of the six events, four were completed between January 10 and 20. On January
22, cash was collected for three of the four events. The other two bookings were for February concerts,
but on January 24, RHC collected half of the $2,500 fee for one of them. On January 27, RHC paid
$3,140 cash for the band’s travel-related costs. On January 28, RHC paid its band members a total of
$2,400 cash for salaries and wages for the first three events. As of January 31, the band members hadn’t
yet been paid wages for the fourth event completed in January, but they would be paid in February at the
same rate as for the first three events. As of January 31, RHC has not yet recorded the $100 of monthly
depreciation on the equipment. Also, RHC has not yet paid or recorded the $60 interest owed on the
promissory note at January 31. RHC is subject to a 15% tax rate on the company’s income before tax.
Required:
1. Prepare
indicated above.
2.
3. Prepare a classified
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 12 images
