Exercise $9-24($Algo$)$ Complete the accounting cycle using long$-$term liabilitiy transactions $($LO$9-2,9-8)($GL$)$

On January $1,2024,$ the general ledger of Freedom Fireworks includes the following account balances:

Accounts Debit Credit

Cash $ $12,200$

Accounts Receivable $36,000$

Allowance for Uncollectible Accounts $ $2,800$

Inventory $153,000$

Land $77,300$

Buildings $130,000$

Accumulated Depreciation $10,600$

Accounts Payable $28,700$

Common Stock $210,000$

Retained Earnings $156,400$

Totals $ $408,500$ $ $408,500$

During January $2024,$ the following transactions occur:

January $1$ Borrow $$110,000$ from Captive Credit Corporation. The installment note bears interest at $6\%$ annually and matures in $5$ years. Payments of $$2,127$ are required at the end of each month for $60$ months.

January $4$ Receive $$32,000$ from customers on accounts receivable.

January $10$ Pay cash on accounts payable, $$21,000.$

January $15$ Pay cash for salaries, $$29,900.$

January $30$ Firework sales for the month total $$200,600.$ The cost of the units sold is $$117,500.$

January $31$ Pay the first monthly installment of $$2,127$ related to the $$110,000$ borrowed on January $1.$

The following information is available on January $31,2024.$

Depreciation on the building for the month of January is calculated using the straight$-$line method. At the time the building was purchased, the company estimated a service life of $10$ years and a residual value of $$25,000.$

The company estimates additional future uncollectible accounts of $$1,892.$

Unpaid salaries at the end of January are $$27,100.$

Accrued income taxes at the end of January are $$9,000.$

The portion of Notes Payable $($long$-$term$)$ due within the next $12$ months is reclassified as Notes Payable $($current$).$ The amount of the reclassification is $$19,546.$