Pls record journal entry 1-4 ### Transaction Recording Steps1. **Record the borrowing of $555,000.** This step involves documenting the amount borrowed, which may involve setting up a liability account for the borrowed funds on the company's books.2. **Record the purchase of inventory worth $72,000 on account.** Here, the company acquires inventory, increasing assets, with a corresponding liability to be paid later. This transaction should be recorded under inventory and accounts payable.3. **Record the payment for inventory in full.** This action clears the accounts payable set up for the inventory purchased, reducing liabilities and cash or equivalent assets.4. **Record the collection of six month's security service fees in advance amounting to $22,200.** This involves entering the receipt of advance payment for services yet to be provided, recognizing it as a liability (unearned revenue), which will be adjusted as services are rendered.---This guide provides a step-by-step approach to recording specific financial transactions, emphasizing the importance of accurate bookkeeping and financial management. **PA10-2 (Algo) Recording and Reporting Current Liabilities with Evaluation of Effects on the Debt-to-Assets Ratio [LO 10-2, LO 10-5]**Jack Hammer Company completed the following transactions. The annual accounting period ends December 31.- **April 30**: Received $555,000 from Commerce Bank after signing a 12-month, 7 percent, promissory note.- **June 6**: Purchased merchandise on account at a cost of $72,000. (Assume a perpetual inventory system.)- **July 15**: Paid for the June 6 purchase.- **August 31**: Signed a contract to provide security service to a small apartment complex starting in September, and collected six months’ fees in advance, amounting to $22,200.- **December 31**: Determined salary and wages of $37,000 were earned but not yet paid as of December 31 (ignore payroll taxes).- **December 31**: Adjusted the accounts at year-end, relating to interest.- **December 31**: Adjusted the accounts at year-end, relating to security service.**Required:**1. & 2. Prepare journal entries for each of the transactions through August 31 and adjusting entries required on December 31.3. Show how all of the liabilities arising from these items are reported on the balance sheet at December 31.**Complete this question by entering your answers in the tabs below.**- Req 1 and 2- Req 3

The journal entries represent the transaction recorded for the first time in the accounting records.…

View transaction list 1 Record the borrowing of $555,000. 2 Record the purchase of inventory worth $72,000 on account. Record the payment for inventory in full. Record the collection of six month's security service fees in advance amounting to $22,200.

View transaction list 1 Record the borrowing of $555,000. 2 Record the purchase of inventory worth $72,000 on account. Record the payment for inventory in full. Record the collection of six month's security service fees in advance amounting to $22,200.

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter18: Acquiring Capital For Growth And Development

Section18.2: Long-term Debt Financing

Problem 1OYO

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Question

Pls record journal entry 1-4

### Transaction Recording Steps

1. **Record the borrowing of $555,000.**

This step involves documenting the amount borrowed, which may involve setting up a liability account for the borrowed funds on the company's books.

2. **Record the purchase of inventory worth $72,000 on account.**

Here, the company acquires inventory, increasing assets, with a corresponding liability to be paid later. This transaction should be recorded under inventory and accounts payable.

3. **Record the payment for inventory in full.**

This action clears the accounts payable set up for the inventory purchased, reducing liabilities and cash or equivalent assets.

4. **Record the collection of six month's security service fees in advance amounting to $22,200.**

This involves entering the receipt of advance payment for services yet to be provided, recognizing it as a liability (unearned revenue), which will be adjusted as services are rendered.

---

This guide provides a step-by-step approach to recording specific financial transactions, emphasizing the importance of accurate bookkeeping and financial management.

**PA10-2 (Algo) Recording and Reporting Current Liabilities with Evaluation of Effects on the Debt-to-Assets Ratio [LO 10-2, LO 10-5]**

Jack Hammer Company completed the following transactions. The annual accounting period ends December 31.

- **April 30**: Received $555,000 from Commerce Bank after signing a 12-month, 7 percent, promissory note.
- **June 6**: Purchased merchandise on account at a cost of $72,000. (Assume a perpetual inventory system.)
- **July 15**: Paid for the June 6 purchase.
- **August 31**: Signed a contract to provide security service to a small apartment complex starting in September, and collected six months’ fees in advance, amounting to $22,200.
- **December 31**: Determined salary and wages of $37,000 were earned but not yet paid as of December 31 (ignore payroll taxes).
- **December 31**: Adjusted the accounts at year-end, relating to interest.
- **December 31**: Adjusted the accounts at year-end, relating to security service.

**Required:**

1. & 2. Prepare journal entries for each of the transactions through August 31 and adjusting entries required on December 31.
3. Show how all of the liabilities arising from these items are reported on the balance sheet at December 31.

**Complete this question by entering your answers in the tabs below.**

- Req 1 and 2
- Req 3

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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