Bearing Inc started business on January 1 2015. The following is a list of information that will pertain to this corporation

The Company uses the Perpetual FIFO method in account for its inventory

The company had the following Post Closing Balance at 12/31/2015

Account Debit Credit

Cash.$ 2,175,254

Account Receivable 641,475

Allowance for Bad Dbt ( 12830)

Land 50,000

Building 200,000

Acumulated Depreciation Building 5128

Equipment 100,00

Acumulated Depreciation Equipment 14,286

Common Stock 100,00

APIC- Common Stock 500,00

Bearing uses the 200% double declining balance method to depreciate all 5, 7 & 10 year property

Bearing uses the Straight Line Mid-Month basis to depreciate all real property

The $ 100,000 of equipment has an expected life of 7 years and no salvage value

The $ 200,000 building has an expected life of 39 years and no salvage value

The following transactions occurred in 2016.

1/1 Issued 150,000 share of $ 1 par common stock to investors at $ 15 per share

1/1 Issued 15,000 share of $ 10 par, 10% preferred stock to investors at $ 25 per share

1/1 Issued $4000,00 in Bonds at par value. The bonds have a stated interest rate of 10%, payable semiannually on July 1 and January 1.

1/1 The estimated useful life and salvage value for the building that was purchased n 2015 was changed. It is now estimated that the building has a remaining life ( as of 1/1/16) of 20 years and a salvage value of $20,000.

1/1 Purchased a building and land for $ 790,000. The building has a 25 year expected useful life and $ 70,000 expected salvage value. The land is valued at $ 70,000

1/1 Leased equipment under a ten-year lease. The ten lease payments of $ 20,000 each are to be made on December 31 of each year. The present value of the equipment is $ 134,202. The interest rate is 8% (life 10 years, no salvage value)

1/15 Purchased Inventory for $125,000.

2/1 Bearing repurchased 15,000 shares of its own common stock to be hed as treasury stock. The price paid was 32 per share

2/20 Sold Inventory on account for $275,000 term 2/10 net 30

3/2 Received notice that customer from 2015 declared bankruptcy and will not be able to pay the remaining balance owed on their bill, $ 4600.

3/10 Received payment for the 2/20 transaction

7/1 Paid Interest in Bonds

7/1 Purchased $ 125,000 of equipment using a bank loan at 7% interest to be paid in 2 years. Interest is due on June 30 each year. The equipment has a life of 7 year and a 5,000 salvage value.

10/1 Retired the interest on the bonds that were issued on 1/1. Bearing had to pay $ 380,000 to retired the bonds. This amount included interest that had accrued since 7/1.

11/17 Paid a cash dividend of $ 0.3 per share on outstanding shares and paid dividends to preferred shareholders.

Other Information

The company uses the % of receivables method in estimating bad debts; 2% of the ending receivables balance is deemed to be uncollectible

Required :

Prepared all Journal entries to record the information for 2016

Prepared all adjusting journal entries as necessary

Please include a sheet on how you calculated your adjusting Journal entries and Inventory