Brian Burns records accruals for utilities expense as an adjusting journal entry at the end of each year. They pay utilities once a year on January 31^st for the prior year. NOTE: There is no payment for utilities on January 31^st of 2021 because January 1 of 2021 is the first day of operations.

January 1Sold 10,000 shares of common stock for $95 per share.

Borrowed $2,000,000 at 8 percent with interest payable semi-annually (on July 1 and January 1).

Purchased 1,000 units of inventory at $150 a piece on credit from Biggie Smalls Inc. Terms are 2/10; n/60

Paid $480,000 for 2 years of rent in advance

Purchased office supplies costing $10,000 with cash

Jan 20Paid Biggie full amount owed

Feb 10Sold 100 units inventory with a list price of $22,000 to M Jagger on credit.

Sold 140 units of inventory for cash of $30,000.

March 15Bought 1,000 units of inventory at $170 a piece from Wolfpack Corporation with cash

April 30Sold 150 units of inventory for cash of $30,000

June 30Purchased land and a building.A $200,000 cash down payment was required and a $800,000 note was accepted by the seller for the balance (12 percent interest payable each year on June 30). The fair value of the land at the date of purchase was deemed to be 300,000 and the fair value of the building was 900,000. The building has an estimated residual value of $0 and a useful life of 30 years.

September 1Brian Burns began subleasing extra space to DJ Moore. DJ Moore paid for $60,000 for six months' in advance.

October 1Purchased equipment for in exchange for a $30,000 non-interest bearing note due in one year. The equipment has an estimated residual value of $2,000 and a useful life of 8 years. Note: Assume an effective interest rate of 8 percent.

October 1Purchased one year of insurance in advance for $12,000

October 14Sold 400 units of inventory to H Gilmore for $100,000 on credit

October 30H Gilmore paid half of the amount owed

Dec 1Repurchased 1,000 shares of stock for $120/share

Dec 15Declared a dividend of $2/share. The dividend will be distributed to shareholders on January 19, 2021.

Dec 15H Gilmore went bankrupt so Brian Burns wrote off the balance owed by H Gilmore as uncollectible (hint: Directly write-off this Account since no allowance has been made yet).

Dec 20Purchased office supplies for $13,000 in cash.

Dec 25Sold 150 units of inventory to J Lennon for $30,000 on Credit

Dec 31Sold 1,000 units Inventory for $200,000 in Cash

Information for Adjusting Entries as of 12/31/21

A count of office supplies revealed $12,000 in office supplies as of 12/31

Receive the 2021 utility bill for $25,000, payable on January 31^st 2021.

All depreciation is straight line.

Brian Burns uses the balance sheet method for estimating bad debts and estimates that 5 percent of outstanding A/R at year-end will be uncollectible.

The income tax rate for 2018 is 21%.

*Remember to record any necessary accruals related to the transactions (e.g., interest expense, unearned rent)