02/01 cannot pay its balance at this time. WwC arranges with Kit Kat to convert the $1,400 balance to a note, and Kit Kat signs a 6-month note, at 12% annual Interest. The principal and all interest will be due and payable to Wwc on August 1, 2012 02/02 WWC pald a $650 Insurance premium covering the month of February. The - amount pald Is recorded directly as an expense. An additional 180 units of Inventory are purchased on account by WwC for $13,500 - terms 2/15, n30. 02/05 WWC pald Federal Express $360 to have the 180 units of Inventory delivered overnight. Delivery occurred on 02/06. 02/10 ON Sales of 150 units of Inventory occurred during the period of 02/07 - 02/10. The sales terms are 2/10, net 30. 02/15 The 30 units that were paid for in advance and recorded in January are delivered to the customer. 25 units of the Inventory that had been sold on 2/10 are returned to WWC. The 02/15 units are not damaged and can be resold. Therefore, they are returned to Inventory. Assume the units returned are from the 2/05 purchase. 02/16 WWC pays the first 2 weeks wages to the employees. The total paid is $2,800. Pald in full the amount owed for the 2/05 purchase of Inventory. WWC records 02/17 purchase discounts in the current period rather than as a reduction of Inventory costs. 02/18 Wrote off a customer's account in the amount of $2,000. COMO $6,600 of rent for January and February was pald. Because all of the rent will soon expire, the February portion of the payment is charged directly to expense. Collected $10,000 of customers' Accounts Receivable. Of the $10,000, the 02/19 discount was taken by customers on $8,000 of account balances; therefore WWC received less than $10,000. WWC recovered $600 cash from the customer whose account had previously 2120 been written off (see 02/18). 02/27 A $950 utility bill for February arrived. It is due on March 15 and will be paid then. 02/28 WWC declared and paid a $950 cash dividend. 02/26 Adjusting Entries: 02/29 Record the $2,800 employee salary that is owed but will be paid March 1. WWC decides to use the aging method to estimate uncollectible accounts. WWC 02/29 determines 8% of the ending balance is the appropriate end of February e mate of uncollectible accounts. 02/29 Record February Interest expense accrued on the note payable. 02/29 Record one month's Interest earned Kit Kat's note (see 02/01). Required: 1-a. Prepare all February Journal entries and adjusting entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
