All Inc. is a manufacturer of custom furniture, which was incorporated on January 3, 2019. The following transactions happened during the year ended December 31, 2019. 1 On January 3rd, the owner invested $750,000 to start the business. 2 3 4 5 6 On January 3rd, Ali signed a two-year lease contract to rent a building which will be used as the main manufacturing facility. The first and last month rent was paid in advance on Jan 3rd. Monthly rent is $5,000. On March 1, All purchased manufacturing equipment at a cost of $200,000. All paid $50,000 in cash and the rest will be paid next year. The equipment has a useful life of 8 years and $5,000 residual value. The company uses double declining balance method of depreciation. On April 1, Ali borrowed $350,000 from a bank. The loan is a 4-year with 4% interest rate. The interest is payable on the first day of each month, beginning May 1st. On April 15, Ali purchased inventory of $150,000 from suppliers on account and is charged 13% harmonized sales tax. On May 1, Ali received an order to build custom furniture for a customer. The customer paid $20,000 in advance. The furniture was delivered at the end of December 2019. The cost of making the furniture was $8,000. The company uses a perpetual inventory system. Ignore HST for this sale. 7 The following expenses were paid during the year. Salaries and wages expense Rent expense Interest expense Required: Prepare journal entries to record the above transactions. For each entry, write the initial entry and then, if necessary, write an adjusting entry at December 31, 2019. 110,000 55,000 9,333