COMP4-1 (Algo) Recording Transactions (Including Adjusting and Closing Entries), Preparing Financial Statements, and Performing Ratio Analysis LO4-1, 4-2, 4-3, 4-4 (IRT) Skip to question Brothers Mike and Tim Hargenrater began operations of their tool and die shop (H & H Tool, Inc.) on January 1, 2019. The annual reporting period ends December 31. The trial balance on January 1, 2020, follows: H & H Tool, Inc. Trial Balance on January 1, 2020 Debit Credit Cash 9,000 Accounts receivable 8,000 Supplies 23,000 Land Equipment 90,000 Accumulated depreciation (on equipment) 9,000 Other noncurrent assets (not detailed to simplify) 12,000 Accounts payable Wages payable Interest payable Dividends payable Income taxes payable Long-term notes payable Common stock (8,000 shares, $.50 par value) 4,000 Additional paid-in capital 92,000 Retained earnings 37,000 Service revenue Depreciation expense Supplies expense Wages expense Interest expense Income tax expense Miscellaneous expenses (not detailed to simplify) Totals 142,000 142,000 Transactions during 2020 follow: Borrowed $20,000 cash on a 5-year, 6 percent note payable, dated March 1, 2020. Purchased land for a future building site; paid cash, $15,000. Earned $311,000 in revenues for 2020, including $61,000 on credit and the rest in cash. Sold 4,000 additional shares of capital stock for cash at $1 market value per share on January 1, 2020. Incurred $101,000 in wages expense and $37,000 in miscellaneous expenses for 2020, with $32,000 on credit and the rest paid in cash. Collected accounts receivable, $36,000. Purchased other assets, $23,000 cash. Purchased supplies on account for future use, $35,000. Paid accounts payable, $34,000. Signed a three-year $41,000 service contract to start February 1, 2021. Declared cash dividends on December 1, $33,000, which were paid by December 31. Data for adjusting entries: Supplies counted on December 31, 2020, $26,000. Depreciation for the year on the equipment, $11,000. Interest accrued on notes payable (to be computed). Wages earned by employees since the December 24 payroll but not yet paid, $25,000. Income tax expense, $10,000, payable in 2021. COMP4-1 Part 6 6. Prepare the closing entry on December 31, 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)