Dinah Soars, Biff Wellington and Duane Pipe are the stockholders of Sharpe Incorporated. The charter of the corporation authorized 500,000 shares of $5 par common stock, and 100,000 shares of $30 par, 3%, preferred stock. As of January 1, 2018, there were 25,000 shares of common stock issued and outstanding and 4,000 shares of preferred stock issued and outstanding.

Selected transactions completed by Sharpe Incorporated during the fiscal yearending December 31, 2018, are as follows:

Jan 1 Issued 13,000 shares of $5 par common stock at $19, receiving cash.

Jan 1 Issued 6,700 shares of $30 par, 3%, preferred stock at $69 for cash.

Feb 1 Purchased equipment for $220,000, paying $20,000 cash and financing the remainder with a 180-day, 5% note payable.

Mar 15 Purchased land for $352,000 by issuing 18,000 shares of common stock.

Mar 31 Purchased a two-year insurance policy for $39,000.

May 1 Purchased 1,600 shares of the companys own common stock at $23 per share.

May 31 Issued $1,000,000 of 8-year, 7% bonds with interest payable semiannually. The amount of cash received was $1,087,936.

July 30 Paid the amount due on the note payable signed on February 1.

Aug 1 Sold 500 shares of treasury common stock purchased on May 1 for $26 per share.

Sept 15 Declared a 2% stock dividend on common stock to be distributed on September 30 to stockholders of record on September 20. The market price per share on September 15 is $26 per share.

Sept 30 Distributed the stock dividend declared September 15.

Oct 1 Borrowed $36,000 from Second Bank by issuing an 7% note. The note is to be repaid in quarterly payments of principal plus interest totaling $2,130 per quarter.

Oct 16 Sold 370 shares of treasury common stock purchased on May 1 for $20 per share.

Nov 30 Paid the semiannual interest and amortized the premium on the bonds issued on May 31.

Dec 1 Declared a cash dividend at the stated amount to preferred stockholders and .50 per share to common stockholders payable on December 30 to stockholders of record on December 16. (Hint: dont forget the shares distributed from the stock dividend)

Dec 30 Paid the cash dividends declared on December 1.

Dec 31 Paid the first quarterly installment of the note issued on October 1.

Dec 31 Record revenue for the year of $1,975,000, received $500,000 in cash, the remainder is on account.

Dec 31 Record expenses for the year, paid in cash (one compound entry): Rent $170,000 Utilities 13,200 Salaries 760,000 Advertising 140,000 Medical insurance 32,000 Commissions 63,000 Legal and accounting 18,000 Miscellaneous 8,400

Adjusting Entries (1) The employees accrued vacation pay at the end of the year was $12,482. (2) Record depreciation on the equipment purchased on February 1, using the straight-line method. The equipment has an estimated 9-year useful life and an estimated residual value of $11,020. (3) Record insurance expired on the policy purchased March 31. (4) Record the adjusting entry for the interest accrued and the amortization of the premium on the bonds payable since the last interest payment. (round the amount to the nearest dollar)

PLEASE PUT INTO T ACCOUNT (MOST IMPORTANT PART)

debit credit 1 Date account title 2 Jan-01 cash (13000 19 247000 common stock 13000*5) Paid in capital in excess of par- common 182000 462300 6 Jan-o1 cash (6700 69) 201000 261300 Preferred stock (6700 30) Paid in capital in excess of par- Preferred 10 Feb-ol equipment 220000 20000 cash note payable 200000 14 Mar-15 Land 352000 1s common stock (18000s 16 Paid in capital in excess of par-common 262000 18 Mar-31 Prepaid insurance 39000 19 cash 39000 21 May-01 Treasury stock 22 cash 36800 36800 1600 23 24 25 May-31 cash 1087936 26bonds payable 27 Premium on bonds payable 28 29 Jul-30 note payable 30 Interest expense (200000.5%*180/360) 31 32 1000000 87936 200000 cash 195000