Chen, Moore, Wynes Inc. thereafter "CMWI") was formed July 1, 2021. The company provides accounting and bookkeeping services to clients in the Waterloo region. Many of these customers are small, family cwned businesses CMWI has decided on a December 31 fiscal year end and uses the following accounts in its poneral ledger Account Name Type (Ansel, Wability, 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 hability 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 ended December 31, 2021 the following transactions occurred: Date Transaction July 1 Borrowed $30,000 from the bank at an interest rate of 4% for 3 years. Interest only payments required every twelve-months Buly 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 months upfront, July Purchased equipment for $10,000. The equipment is to be deprecated on a straleht line has over 3 years and is expected to have a residual value of $1,000. Paid $4,000 cash and signed a note payable for the remaining amount. The note cartes interest at a rate of 10%. The note and the interest are payable onto 2021 July 13 Received $9,000 cash for bookkeeping services to be provided equally ach month for the period August 1, 2021 to 1,2072 A 15 sued an invoice for 55.000 for consulting services provided dung August to client facing bankruptcy Terms 3/15, CMWI assume that of 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 dient from August 15 transaction has declared bankruptcy and will not be making any further payments. Wrote off the outstanding amount owed by the dient December 10 Issued an invoice for $10,000 for consulting services provided during December to client expanding operations. Terms are 2/15, net 30. CMWIssumes that 5% of any outstanding balances at the end of the year will be uncollectable Resulted Prepare all journal entries necessary to record the above transactions and any necessary December 31 yend adjusting entries. You do not need to provide dosing entries. Use only the account cames provided. Ignore income and sales taxes. Clearly label whether the number is being debited or credited by puting door in front of your number
