Exercise 9-21A Complete the accounting cycle using long-term liabilitiy transactions (LO9-2, 9-8) (GL) On January 1, 2021, the general ledger of Freedom Fireworks includes the following account balances: Credit Accounts Cash Accounts Receivable Inventory Land Buildings Allowance for Uncollectible Accounts Accumulated Depreciation Accounts Payable Common Stock Retained Earnings Totals Debit $ 12,000 35,600 152,800 75,300 128,000 $ 2,600 10,400 26,500 208,000 156,200 $403,700 $403,700 During January 2021, the following transactions occur: January 1 Borrow $108,000 from Captive Credit Corporation. The installment note bears interest at 5% annually and matures in 5 years. Payments of $2,038 are required at the end of each month for 60 months. January 4 Receive $31,800 from customers on accounts receivable. January 10 Pay cash on accounts payable, $19,000. January 15 Pay cash for salaries, $29,700. January 30 Firework sales for the month total $198,000. Sales include $65,800 for cash and $132,200 on account. The cost of the units sold is $116,500. January 31 Pay the first monthly installment of $2,038 related to the $108,000 borrowed on January 1. Round your interest calculation to the nearest dollar. The following information is available on January 31, 2021. The following information is available on January 31, 2021. a. 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 $24,800. b. Unpaid salaries at the end of January are $26,900. C. Accrued income taxes at the end of January are $8,800. d. $19,581 of the long-term note payable balance will be paid over the next year. e. The company estimates and records bad debt expense (and adds to the Allowance account through this journal entry) at the end of each month. At the end of January, the company determines that determines $3,800 of the total Accounts Receivable account is over 90 days old, with the remaining A/R balance being current (Hint use the A/R balance in the General Ledger Tab). 50% of the A/R older than 90 days is estimated to be uncollectible, and 2% of the current balance is estimated to be uncollectible. Please calculate the amount that needs to be added to the Allowance account and Bad Debt Expense and complete the journal entry. (Watch video tutorial on this subject: https://vimeo.com/cdlvideo/review/254531867/7c9cc2a218) Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet If no entry is required for a transaction/event, select "No Journal Entry Required in the first account field. View transaction list View journal entry worksheet No Date Account Title Debit Credit 1 Jan 01 108,000 Cash Notes Payable (Long-term) 108,000 2 Jan 04 Cash 31,800 Accounts receivable 31,800 9 Jan 31 Bad debt expense Allowance for uncollectible accounts 10 Jan 31 26,900 Salaries expense Salaries payable 26,900 11 Jan 31 8,800 Income tax expense Income tax payable 8,800 12 Jan 31 19,581 Notes Payable (Long-term) Notes Payable (Current) 19,581 13 Jan 31 Sales revenue Retained earnings 14 Jan 31 116,500 Retained earnings Cost of goods sold Salaries expense Bad debt expense Depreciation expense Interest expense Income tax expense 860 450 8,800 Post-closing Freedom Fireworks Multiple-Step Income Statement For the Month ended January 31, 2021 Book 0 Cost of goods sold Gross profit $ 0 Salaries expense Bad debt expense 56,600 0 0 Depreciation expense Total operating expenses Operating income interest expense Income before taxes 56,600 (56,600) 0 (56,600) Net income $ (56,600) Post-closing Freedom Fireworks Classified Balance Sheet January 31, 2021 Assets Liabilities Current Assets: Current Liabilities: Cash $ 166,862 Accounts payable $ 7,500 Accounts receivable 136,000 Allowance for uncollectible accounts Income tax payable 8,800 (2,600) 36,300 Inventory Total Current Liabilities 16,300 Long-term Liabilities Notes Payable (Long-term) 86,831 Total Current Assets 336,562 Total Liabilities 103,131 Noncurrent Assets: Stockholders' Equity Land 75,300 Common stock 208,000 99,600 Retained earnings Total Stockholders' Equity $ 411,862 Total Liabilities & Stockholders' Equity 307,600 410,731 Total Assets $ Income Statement Balance Sheet>