Chen, Moore, & Wynes Inc. (hereafter "CMWI") was formed July 1, 2021. The contpany provides accounting and bookkeeping services to clients in the Waterloo region. Many of these customers are small, family-owned businesses. CMWI has decided on a December 31 fiscal year-end and uses the following accounts in its general ledger: Account Name Type (Asset, liability, equity, revenue, expense) Cash Current asset Accounts receivable Current asset Allowance for doubtful accounts Current asset contra account Prepaid rent Current asset Equipment Non-current asset Accumulated depreciation Non-current asset contra-account Accounts payable Current liability Interest payable Current liability Deferred revenue Current liability Notes payable - current Current liability Notes payable - long term Non-current liability Common shares Equity Retained earnings Equity Service revenue Revenue Service Discounts Revenue contra account Bad debt expense Expense Depreciation expense Expense Interest expense Expense Rent expense Expense Wage expense Expense During the year onded December 31, 2021 the following transactions occurred: Date Transnction July 1 Borrowed $30,000 from the bank at an interest rate of 4%. for 3 years. Interest only payments required every twelve-months July 2 Found office space to rent. Agreed to a one-year lease starting July 1, 2020 at a cost of $2,000 a month. Required to pay for the first six months upfront. July 3 Purchased equipment for $10,000. The equipment is to be depreciated on a straight-line basis over 3 years and is expected to have a residual value of $1,000. Pald $4,000 cash and signed a note payable for the remaining amount. The note carries interest at a rate of 10%. The noto and the interest are payable on October 31, 2021 July 15 Received $9,000 cash for bookkeeping services to be provided equally each month for the period August 1, 2021 to July 1, 2022. August 15 Issued an invoice for $5,000 for consulting services provided during August to a client facing bankruptcy Terms are 2/15, net 30. CMWI assumes that 5% of any outstanding balances at the end of the year will be uncollectable. August 28 Received half the amount owing from August 15 Invoice. October 31 Pay principal and interest on note payable. December 3 Received a notice saying that the client from August 15 transaction has declared bankruptcy and will not be making any further payments. Wrote-off the outstanding amount owed by the client. December 10 Issued an invoice for $10,000 for consulting services provided during December to a client expanding operations. Terms are 2/15, net 30. CMWI assumes that 5% of any outstanding balances at the end of the year will be uncollectable. Required Prepare all journal entries necessary to record the above transactions and any necessary December 31 year-end adjusting entries. You do not need to provide closing entries. Use only the account names provided. Ignore income and sales taxes Clearly label whether the number is being debited or credited by putting dr or cr in front of your number
