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Prepare journal entries of all mentioned transactions

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Reference no: EM133053592

Question - Jacob and sons, Inc is a grocery store that purchased on January 1st a new vehicle for the delivery of clients.

The price of the vehicle if $50,000. The company estimates the useful life or 8 years and a salvage value of $2,000.

In order to finance the purchase the company issued a 5% note payable. Interests are paid every 1st of January of the following year. On 1st of June the company contracted a 12 months insurance policy for $900.

At 31st of November the company had received an order from a client for $20,000. The client has made the payment and the merchandise has been delivered on 31st of December.

1. Prepare the journal entries of all the above mentioned transactions (purchase of the vehicle, issuance of the note payable, prepayment of the insurance, and advance payment from the client.

2. Prepare the adjusting entries to be made on 31st of December (depreciation, interest, insurance, unearned revenue).

Reference no: EM133053592

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