Identify transactions and write journal entries for them Southward Stores Ltd is a general merchandise retailer operating in the suburbs. During a recent month, the events in the following list happened. For each event, decide whether it is an accounting transaction. If it is an accounting transaction, state briefly why and record it in journal entry form. Indicate where in the financial statements you wish each account to appear. If it is not an accounting transaction, state briefly why it is not.

1 Southward borrowed $500 000 from the Commonwealth Bank. Payment is due in three years, but the loan can be called on 10 days’ notice if Southward fails to make any of the monthly interest payments, which begin next month.

2 The company ordered inventory for resale, costing $300 000, to be delivered in 40 days, and sent a deposit of $10 000 with the order.

3 The company renewed its lease on the store premises, signing an agreement that stipulated that, beginning in three months, the monthly rent would rise from $21 000 to $23 000.

4 Southward was charged with unfair pricing of its main line of merchandise. News of this sent the company’s shares (listed on the stock exchange) down in price from $10 to $8.50 each. The company has one million shares issued, all publicly traded.

5 The company declared a dividend of $0.50 cents per share, to be paid in one week, on each of its one million issued shares. This news sent the company’s shares up by $0.40 each on the stock exchange.