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Problem
Logan Company began business on January 1, 2016. The company's year-end is December 31. The following events occurred during the first year of operations:
Apr. 1 Received $120,000 in cash from customers for services to be provided evenly during the next twelve months.
July 1 Acquired a building by borrowing $350,000 at 6% interest, principal and interest payable at maturity in ten years. Annual depreciation expense is $12,000.
Oct. 1 Paid cash in the amount of $18,000 for a one-year property insurance policy.
1. Prepare the necessary adjusting journal entries at December 31st and for each of the adjusting entries, indicate which of the following type of entry was recorded: accrued expense, accrued revenue, deferred expense, or deferred revenue. 10 points total.
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The company's breakeven point is $120,000 in total sales. How much profit will the company make if it sells 5,000 units
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