Comprehensive Problem 3 Part 1:

Selected transactions completed by Kornett Company during its first fiscal year ended December 31, 20Y5, were as follows:

1. Journalize the selected transactions. Assume 360 days per year.

If no entry is required, select "No entry required" from the dropdown and leave the amount boxes blank. If an amount box does not require an entry, leave it blank.

Jan. 3: Issued a check to establish a petty cash fund of $4,500.

Date	Description	Debit	Credit
Jan. 3	Accounts PayableAccounts ReceivableCashNo entry requiredPetty Cash	fill in the blank 2	fill in the blank 3
	Accounts PayableAccounts ReceivableCashNo entry requiredPetty Cash	fill in the blank 5	fill in the blank 6

Feb. 26: Replenished the petty cash fund, based on the following summary of petty cash receipts: office supplies, $1,680; miscellaneous selling expense, $570; miscellaneous administrative expense, $880.

Date	Description	Debit	Credit
Feb. 26	Accounts PayableCashNo entry requiredOffice SuppliesPetty Cash	fill in the blank 8	fill in the blank 9
	CashCash Short and OverMiscellaneous Selling ExpenseNo entry requiredPetty Cash	fill in the blank 11	fill in the blank 12
	Accounts PayableCashMiscellaneous Administrative ExpenseNo entry requiredPetty Cash	fill in the blank 14	fill in the blank 15
	CashCash Short and OverNo entry requiredOffice SuppliesPetty Cash	fill in the blank 17	fill in the blank 18

Apr. 14: Purchased $31,300 of merchandise on account, terms n/30. The perpetual inventory system is used to account for inventory.

Date	Description	Debit	Credit
Apr. 14	Accounts PayableCashInventoryNo entry requiredPurchases	fill in the blank 20	fill in the blank 21
	Accounts PayableCashInventoryNo entry requiredPurchases	fill in the blank 23	fill in the blank 24

May 13: Paid the invoice of April 14.

Date	Description	Debit	Credit
May 13	Accounts PayableCashNo entry requiredNotes ReceivableSales	fill in the blank 26	fill in the blank 27
	Accounts ReceivableCashInventoryNo entry requiredSales	fill in the blank 29	fill in the blank 30

May 17: Received cash from daily cash sales for $21,200. The amount indicated by the cash register was $21,240.

Date	Description	Debit	Credit
May 17	Accounts ReceivableCashNo entry requiredNotes ReceivableSales	fill in the blank 32	fill in the blank 33
	Accounts ReceivableCash Short and OverNo entry requiredSalesSales Discounts	fill in the blank 35	fill in the blank 36
	Accounts ReceivableCashCash Short and OverNo entry requiredSales	fill in the blank 38	fill in the blank 39

June 2: Received a 60-day, 8% note for $180,000 on the Ryanair account.

Date	Description	Debit	Credit
June 2	Accounts Receivable-RyanairCashInterest RevenueNo entry requiredNotes Receivable	fill in the blank 41	fill in the blank 42
	Accounts Receivable-RyanairCashInterest RevenueNo entry requiredNotes Receivable	fill in the blank 44	fill in the blank 45

Aug. 1: Received amount owed on June 2 note, plus interest at the maturity date.

Date	Description	Debit	Credit
Aug. 1	Accounts Receivable-RyanairCashInterest RevenueNo entry requiredNotes Receivable	fill in the blank 47	fill in the blank 48
	Accounts Receivable-RyanairCashInterest ReceivableNo entry requiredNotes Receivable	fill in the blank 50	fill in the blank 51
	Accounts Receivable-RyanairCashInterest RevenueNo entry requiredNotes Receivable	fill in the blank 53	fill in the blank 54

Aug. 24: Received $7,600 on the Finley account and wrote off the remainder owed on a $9,000 accounts receivable balance. (The allowance method is used in accounting for uncollectible receivables.)

Date	Description	Debit	Credit
Aug. 24	Accounts Receivable-FinleyBad Debt ExpenseCashNo entry requiredSales	fill in the blank 56	fill in the blank 57
	Accounts Receivable-FinleyAllowance for Doubtful AccountsBad Debt ExpenseNo entry requiredSales	fill in the blank 59	fill in the blank 60
	Accounts Receivable-FinleyAllowance for Doubtful AccountsCashNo entry requiredSales	fill in the blank 62	fill in the blank 63

Sept. 15: Reinstated the Finley account written off on August 24 and received $1,400 cash in full payment.

Date	Description	Debit	Credit
Sept. 15	Accounts Receivable-FinleyAllowance for Doubtful AccountsCash Short and OverNo entry requiredNotes Receivable	fill in the blank 65	fill in the blank 66
	Allowance for Doubtful AccountsCashNo entry requiredNotes ReceivableSales	fill in the blank 68	fill in the blank 69
	Allowance for Doubtful AccountsBad Debt ExpenseCashNo entry requiredNotes Receivable	fill in the blank 71	fill in the blank 72
	Accounts Receivable-FinleyBad Debt ExpenseCashNo entry requiredNotes Receivable	fill in the blank 74	fill in the blank 75

Sept. 15: Purchased land by issuing a $670,000, 90-day note to Zahorik Co., which discounted it at 9%.

Date	Description	Debit	Credit
Sept. 15	Accounts PayableCashLandNo entry requiredNotes Payable	fill in the blank 77	fill in the blank 78
	Accounts PayableCashInterest ExpenseNo entry requiredNotes Payable	fill in the blank 80	fill in the blank 81
	Accounts PayableInterest ExpenseLandNo entry requiredNotes Payable	fill in the blank 83	fill in the blank 84

Oct. 17: Sold office equipment in exchange for $135,000 cash plus receipt of a $100,000, 90-day, 9% note. The equipment had a cost of $320,000 and accumulated depreciation of $64,000 as of October 17.

Date	Description	Debit	Credit
Oct. 17	Accounts PayableCashNo entry requiredNotes PayableOffice Equipment	fill in the blank 86	fill in the blank 87
	Depreciation Expense-Office Equip.Gain on Sale of Office EquipmentNo entry requiredNotes ReceivableOffice Equipment	fill in the blank 89	fill in the blank 90
	Accumulated Depreciation-Office Equip.Depreciation Expense-Office Equip.Notes Payable No entry requiredOffice Equipment	fill in the blank 92	fill in the blank 93
	Depreciation Expense-Office Equip.Gain on Sale of Office EquipmentLoss on Sale of Office EquipmentNo entry requiredOffice Equipment	fill in the blank 95	fill in the blank 96
	Accumulated Depreciation-Office Equip.Gain on Sale of Office EquipmentNo entry requiredNotes ReceivableOffice Equipment	fill in the blank 98	fill in the blank 99

Nov. 30: Journalized the monthly payroll for November, based on the following data:

Salaries				Deductions
Sales salaries		$135,000		Income tax withheld		$39,266
Office salaries		77,250		Social security tax withheld		12,735
		$212,250		Medicare tax withheld		3,184

Unemployment tax rates:
State unemployment		5.4%
Federal unemployment		0.8%
Amount subject to unemployment taxes:
State unemployment		$5,000
Federal unemployment		5,000

Date	Description	Debit	Credit
Nov. 30	CashMedicare Tax PayableNo entry required Sales Salaries ExpenseSales Salaries Payable	fill in the blank 101	fill in the blank 102
	Cash No entry requiredOffice Salaries ExpenseOffice Salaries PayableSocial Security Tax Payable	fill in the blank 104	fill in the blank 105
	CashEmployees Income Tax ExpenseEmployees Income Tax PayableNo entry required Sales Salaries Expense	fill in the blank 107	fill in the blank 108
	Accounts Payable CashNo entry requiredSocial Security Tax ExpenseSocial Security Tax Payable	fill in the blank 110	fill in the blank 111
	Accounts PayableCashMedicare Tax ExpenseMedicare Tax Payable No entry required	fill in the blank 113	fill in the blank 114
	Accounts Payable CashNo entry requiredSalaries Payable Sales Salaries Expense	fill in the blank 116	fill in the blank 117

Nov. 30: Journalized the employer's payroll taxes on the payroll.

Date	Description	Debit	Credit
Nov. 30	Cash No entry requiredPayroll Taxes ExpensePayroll Taxes PayableSocial Security Tax Payable	fill in the blank 119	fill in the blank 120
	Cash No entry requiredPayroll Taxes PayableSocial Security Tax ExpenseSocial Security Tax Payable	fill in the blank 122	fill in the blank 123
	CashMedicare Tax ExpenseMedicare Tax Payable No entry requiredPayroll Taxes Payable	fill in the blank 125	fill in the blank 126
	Cash No entry requiredState Unemployment Tax ExpenseState Unemployment Tax PayablePayroll Taxes Expense	fill in the blank 128	fill in the blank 129
	CashFederal Unemployment Tax ExpenseFederal Unemployment Tax Payable No entry requiredPayroll Taxes Payable	fill in the blank 131	fill in the blank 132

Dec. 14: Journalized the payment of the September 15 note at maturity.

Date	Description	Debit	Credit
Dec. 14	CashInterest ExpenseNo entry requiredNotes PayableNotes Receivable	fill in the blank 134	fill in the blank 135
	CashInterest ExpenseNo entry requiredNotes PayableNotes Receivable	fill in the blank 137	fill in the blank 138

Dec. 31: The pension cost for the year was $190,400, of which $139,700 was paid to the pension plan trustee.

Date	Description	Debit	Credit
Dec. 31	CashNo entry requiredOffice Salaries ExpensePension ExpenseUnfunded Pension Liability	fill in the blank 140	fill in the blank 141
	CashNo entry requiredNotes PayablePayroll Taxes ExpensePension Expense	fill in the blank 143	fill in the blank 144
	No entry requiredNotes PayableNotes ReceivablePension ExpenseUnfunded Pension Liability	fill in the blank 146	fill in the blank 147