Reference no: EM132950197
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 230,000 shares of $6-par-value common stock for $1,380,000 in cash.
-Borrowed $550,000 from Oglesby National Bank and signed a 12% note due in two years.
-Incurred and paid $400,000 in salaries for the year.
-Purchased $670,000 of merchandise inventory on account during the year.
-Sold inventory costing $600,000 for a total of $940,000, all on credit.
-Paid rent of $330,000 on the sales facilities during the first 11 months of the year.
-Purchased $150,000 of store equipment, paying $53,000 in cash and agreeing to pay the difference within 90 days.
-Paid the entire $97,000 owed for store equipment and $600,000 of the amount due to suppliers for credit purchases previously recorded.
-Incurred and paid utilities expense of $43,000 during the year.
-Collected $845,000 in cash from customers during the year for credit sales previously recorded.
-At year-end, accrued $66,000 of interest on the note due to Oglesby National Bank.
-At year-end, accrued $30,000 of past-due December rent on the sales facilities.
Required -
1. Record each transaction in the appropriate columns. Indicate the financial statement effect.
2. Prepare the journal entry for the above transactions.