Reference no: EM132731222

Problem 1: Write journal entry for the 20X2 Journal entries:

1) January 1: The company issues 15,000 shares of common stock (no par value) for $220,000 to pay off the $220,000 bonds payable that was issued at face value.

2) January 1: The company purchases an 8-month insurance policy for $22,800 that starts also on January 1. Assume the policy is used evenly each month.

3) January 1: The company sells all of its trucks account for $21,700. The original cost was $46,900 and had accumulated depreciation of $32,300.

4) January 8: The company has a customer pay their full account balance from a December 27, 20X1, inventory sale on account. Assume that the company uses the gross method for cash discounts and that the customer purchased 3 computers for $490 each on account under terms 2/20, N/50.

5) January 11: The company purchases a $34,800 indefinite-life franchise agreement.

6) January 22: The company fulfills a large, $165,000 purchase order of various inventory items that was paid in advance on November 1, 20X1. Assume a cost of goods sold of $78,000 on the order.

7) February 1: The company pays $5,700 for January's utilities expense.

8) February 1: The company purchases new equipment for $30,200. The company also pays $200 for shipping the equipment and $500 for equipment installation. The equipment is assumed to have a $1,000 salvage value and 6 years of useful life.

9) February 14: The company writes off a customer's entire $3,600 account balance that is deemed to be uncollectible.

10) February 23: The company declares cash dividends of $34,000 for common shareholders. Assume that the dividend payment will occur on April 23.

11) March 3: The company sells a customer 21 desktop computers at $515 each. Assume that the company uses a LIFO cost flow assumption, and that the company's inventory before the sale had 15 desktop computers that cost $340 each from September 20X1 and 18 computers that cost $350 each from November 20X1.

12) March 29: The company loans their supplier money in exchange for the supplier signing a 4-year, 8%, $44,000 note with interest payments due at each year-end. Assume a 9% market rate for similar risk notes (hint: time value of money is needed).

13) March 30: The company internally develops a copyright by spending $3,700 in research costs, $800 in filing fees, and $6,500 in consulting services.