10. 1/08/2020 Ck #1006 11. 1/08/2020 12.1/09/2020 13. 1/13/2020 Ck #1007 14. 1/14/2020 15. 1/14/2020 Deposit #3 16. 1/16/2020 Ck #1008 17. 1/16/2020 18. 1/20/2020 Deposit #4 Record the January 2020 transactions in the general journal (last section of this practice set) using the following events. No explanation is required for the journal entries. Instead of recording the names of the accounts use the account number. Prepare the journal entries as shown in the practice set. Transactions Date Deposito Description / Check No. 1. 1/02/2020 Blaise met with his lawyer and CPA for advice on starting the business. The lawyer told Mr. Maverick to register the company name Maverick's Boards with the County of El Paso. In addition, Mr. Maverick will get an employer identification number (EIN) from the Internal Revenue Service and get a sales tax permit from the state of Texas. 2. 1/02/2020 Deposit #1 Mr. Maverick opened a business checking account at Wells Fargo Bank by depositing $70,000. The corporation issued him a stock certificate for 7,000 shares of common stock with no par value. 3. 1/03/2020 Ck #1001 Mr. Maverick signed a one-year rental. He was required to pay $9,000 for rent for the months of January 1, 2020 - June 30, 2020. 4. 1/03/2020 Ck #1002 Arranged for a general business liability insurance policy and paid $4,000 to State Penn Insurance. This premium is for twelve months coverage. Paneraie premam 5. 1/03/2020 Purchased a new computer system that cost $5,200 from Computer Inc. for use in the business. Mr. Maverick signed a 6 month, 10% note payable for the cost of the system. The computer system has an estimated useful life of five years the residual (salvage) value is $400. This will be recorded as Computer Equipment. Depreciation will be an adjusting entry using straight- line de preciation 6. 1/05/2020 Deposit #2 Signed a note payable to borrow $10,000 from Wells Fargo bank. Interest is 12% annually and the note is to be repaid with interest in twelve months. Interest will be an adjusting entry. 7. 1/05/2020 Ck #1003 Paid $1,100 for shipping supplies. 1/06/2020 Ck #1004 Paid $14,600 for furniture and fixtures. The estimated service life of these assets is 8 years. The residual (salvage) value is $200. These items will be recorded as Furniture and Fixtures and depreciated accordingly. Depreciation will be done in the adjusting journal entries using straight-line depreciation. 9. 1/06/2020 Ck #1005 Arranged for Sun City Movers to make the delivery of the computer system and paid the delivery charge of $750. This charge should be added to the cost of the computer equipment purchased and depreciated on the same basis as the computer equipment. The depreciation will be calculated in adjusting journal entries. Purchased $450 of office supplies for cash from Office Supplies Co. Purchased $8,000 of merchandise inventory (surfboards) on account. The vendor did not extend credit terms. Purchased $6,000 of merchandise inventory (wakeboards) on account There were no credit terms for prompt payment. Mr. Maverick received and paid the $940 charge from lawyer. Maverick's Boards is now open for business. Sold merchandise for $7,200 cash. Sales Tax was $594. The cost of the Surfboards is $3,000; the cost of the Wakeboards is $1,100. Part of this sale must be delivered to the customer. The merchandise will be shipped FOB destination. Paid $250 to ship the merchandise. Purchased additional surfboards on account for $4,500. Credit terms were 2/15, 1/30 Recorded cash sales that totaled $8,300. Sales tax is $685. The cost of merchandise sold was $4,500 (surfboards were $2,500; wakeboards were $2,000). Mr. Maverick joined the El Paso Chamber of Commerce. He paid the registration fee of $200. Mr. Maverick participated in a surfboard exhibition held at the convention center. He felt this was a good way to publicize his new business. Convention Center charged Mr. Maverick $800. He will pay the bill later, He considers this an advertising and promotion expense. Mr. Maverick paid the Convention Center rental. Paid for the wakeboards purchased on 1/09/2020 Mr. Maverick recorded cash sales totaling $9,000. Sales tax is $743. The cost of the merchandise sold was $4,500 (surfboards $3,000; wakeboards cer $1,500). Paid the balance due for the surfboards. There are two invoices. American Express sent bill for $235 for gasoline. This was automatically deducted from Blaise's checking account as a debit memo. Received but did not pay the utility bill for the month, $445. Paid the first monthly installment on the computer equipment. The payment amount is $910. Of this amount, $43.33 is for interest and $866.67 is for principal. 19. 1/22/2020 Ck #1009 20. 1/23/2020 21. 1/23/2020 22. 1/26/2020 Ck #1010 23. 1/26/2020 Ck #1011 24. 1/27/2020 Deposit #5 8 25. 1/27/2020 Ck #1012 26. 1/30/2020 27. 1/30/2020 28. 1/30/2020 Ck #1013 29. 1/30/2020 Deposit #6 Instructions Recorded sales made for the last week of the month. Sales tax is $248. Total cash sales were $3,000. The cost of the merchandise sold was $1,800 (surfboards $1,100; wakeboards $700) Paid the sales tax to the proper taxing authority Declared and paid a cash dividend of $650 to Mr. Maverick. 30, 1/31/2020 Ck #1014 31. 1/31/2020 Ck #1015 Once all journal entries are recorded in the practice set, record the eight adjusting journal entries below and round to the nearest cent if necessary. The following are the adjusting lournal entries for the month of January. Record all adjusting entries on January 31, 2020. Record Adjusting Entries: Record the following month end adjusting entries for the month of January. Write the journal entries in the practice set after the original journal entries. Round all answers to the nearest cent. a. $70 of office supplies remained on hand. b. $200 of shipping supplies remained on hand. C. $1,300 of wages for the part-time help from Irene's Temp Services for January should be accrued. Do not worry about payroll taxes; Temp Services Inc. will handle these. d. Make the necessary adjusting entries for one month's depreciation for the Computer Equipment using Straight Line Depreciation. e. Make the necessary adjusting entry for one month's depreciation for the furniture and fixtures using Straight Line Depreciation f. One month of the prepaid insurance has expired. g. One month of the prepaid rent has expired. h. Record the interest for the loan from Wells Fargo for one month. Make sure you prepare the journal entries and the adjusting entries and write them in the practice set