Reference no: EM132935874
Question - Use the horizontal model, or write the journal entry, for each of the following transactions and adjustments that occurred during the first year of operations at Kissick Co.
-Issued 100,000 shares of $5-par-value common stock for $500,000 in cash.
-Borrowed $250,000 from Oglesby National Bank and signed a 12% note due in three years.
-Incurred and paid $190,000 in salaries for the year.
-Purchased $320,000 of merchandise inventory on account during the year.
-Sold inventory costing $290,000 for a total of $455,000, all on credit.
-Paid rent of $55,000 on the sales facilities during the first 11 months of the year.
-Purchased $75,000 of store equipment, paying $25,000 in cash and agreeing to pay the difference within 90 days.
-Paid the entire $50,000 owed for store equipment and $310,000 of the amount due to suppliers for credit purchases previously recorded.
-Incurred and paid utilities expense of $18,000 during the year.
-Collected $412,000 in cash from customers during the year for credit sales previously recorded.
-At year-end, accrued $30,000 of interest on the note due to Oglesby National Bank.
-At year-end, accrued $5,000 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.