Reference no: EM132825456

Question - The following list of transactions occurred during the year ended December 31, 2020 for We the North Ltd. (WTN). WTN is a private company operating in Manitoba that specializes in selling sporting equipment.

a) On February 2, WTN borrowed $100,000 from Tangerine Bank. Tangerine had WTN sign a $110,000 zero-interest-bearing note due in one year on February 2, 2021.

b) On March 1, WTN purchased new office equipment on account for $18,000 plus applicable taxes.

c) WTN purchased a promotional vehicle for $89,000 from their local BMW dealership on April 30. WTN paid $8,500 in cash and signed a one-year, 7% note for the balance of the purchase. (You can ignore PST and GST on this purchase). The vehicle has a residual value of $6,000 and an estimated life of 7 years. WTN uses straight-line depreciation for these types of assets.

d) On May 5, WTN loaned a local sports team jerseys and required equipment for an upcoming provincial event. The local sports team was required to provide WTN with a $500 deposit that would be refunded if the jerseys and equipment were returned in satisfactory condition at the end of the event. The items were returned in adequate condition on May 30.

e) On June 30, WTN made an income tax installment payment of $24,000 to Canada Revenue Agency (CRA).

f) On July 2, WTN purchased goods with cash discount terms of 3/10, n/30 from Red Ltd. for $58,000. WTN records purchases and related account payable using the periodic system at net amounts after cash discounts. WTN paid for the goods on July 17.

g) WTN's board of directors declared a $22,000 cash dividend on August 1. The dividend was paid out on October 1.

h) At the start of November, the company was informed that due to a change in legislation WTN will be legally responsible for restoring the company's storage facility area when it closes in 8 years to its previous state. The expense is considered a land improvement and the cost is estimated at a fair value of $75,000. i) WTN's corporate income tax return showed taxable income of $450,000. The company's tax rate is 30%.

Required - Record the journal entries required for each of the above transactions on the date they occurred. Also, record any year end adjusting entries required to update the financial statements as of at December 31, 2020.