Financial Statement Homework #3 Name YOU MUST SUBMIT ALL HANDWRITTEN PAGES OF THIS DOCUMENT Part 1: Bisbee Mountain Company Trial Balance 11/30/17 Cr Dr 172,000 124,000 1,000 50,000 55,000 62,000 75,000 0 32,000 94,000 Cash Accounts Receivable Allowance for Doubtful Accounts Short Term Note Receivable Supplies Inventory Equipment Building Accumulated Depreciation Copyright Accounts Payable Dividends Payable Interest Payable Unearned Revenue ST Note Payable LT Mortgage Payable Bonds Payable Premium on Bonds Payable Common Stock - $1.25 par Paid In Capital In Excess of Par-CS Preferred Stock - $5 par Paid In Capital In Excess of Par-PS Treasury Stock Retained Earnings Dividends Sales Revenue Sales Returns & Allowances Sales Discounts Cost of Goods Sold Bad Debts Expense Depreciation Expense Wages Expense Rent Expense Insurance Expense Supplies Expense Interest Revenue Interest Expense Gain on Sale of Equipment Income Tax Expense Total 12,000 0 0 24,000 22,500 0 300,000 26,840 105,000 86,000 1,000 50,000 0 3,500 2,000 390,160 7,000 3,000 46,000 5,000 16,000 167,500 98,000 25,000 16,000 1,000 6,500 15,000 46,000 1,070,000 1,070,000 Instructions: You must turn in the work performed on the sheets printed with this page. This WILL NOT BE ACCEPTED ON PLAIN PAPER. Write the journal entries (on the following General Journal page) required for each of the events described below. Write the entries in the order described below (#1 - #8). Use ONLY the accounts listed on the trial balance for your journal entries. Post the transactions to individual T-accounts and prepare an adjusted trial balance for your assigned company from page one as of December 31, 2017. . . 1. The company purchased a building December 1, 2017 with a LT Mortgage Payable of $300,000 at 8% interest. (Record the purchase of the building.) 2. The company issued 1,000 shares of Common Stock for $6,000 on December 25, 2017. 3. On December 29, 2017 the company declared a cash dividend of $3.00 per share for common stock on the shares issued and declared (including the additional 1,000 shares issued on December 25th.) 4. The terms of the LT mortgage payable from #1 above require the company to make monthly installment payments over the term of the loan. Each payment consists of interest on the unpaid balance of the loan reduction of loan principal. Record the first monthly payment of $3,800 on the LT Mortgage Payable on December 31, 2017. 5. The company last paid interest on the ST note payable on November 1, 2017. Record the accrued interest expense for the last 2 months of 2017. The annual interest rate is 8%. Round to nearest whole dollar. 6. The Bonds Payable and related Premium amounts on the Nov. trial balance relate to the Jan. 1, 2017 issuance of the following bonds: On Jan. 1, 2017, the company issued 10%, 10-year bonds when the market rate for similar investments was 8%. The company pays interest each year on January 1st. On Dec. 31, 2017, use the effective interest method of amortizing the premium on bonds payable to accrue the interest expense for 2017. Round your interest expense calculation to the nearest whole dollar. 7. The Unearned Revenue amount on the Nov. trial balance relates to amounts that the company previously collected in cash for sales that were to be completed in the future. The company completed some of these sales during December and now owes only $10,000 of that unearned revenue. Record the necessary adjustment for December 31, 2017. 8. On December 31, 2017, the company purchased 50 shares of its own Preferred Stock for Treasury Stock for $11 per share. DATE GENERAL JOURNAL ACCOUNT NAME DEBIT CREDIT 24/12 Buiding 300.000 12/25/17 Cash 1,250 14.750 1255,000 1,800 3,800 300,000 IT Mortgage Parable 6.000 Commonstock Pald-in capital cxess Parcs 1/29/17 Dividends 255,000 Dividends Payable 12/31/17 Interest Expense 2,000 LT Mortgage payable cash 1/31/0 Interest Expense Interest Payable 2.31/17 Interest Expense (26,147 Premwm on Bonds Payable 3,853 Interest Payable 2310 Uncained revenue 14,000 Sales Revenue 12/31/17 Treasury stock 1550 cash 300 30,000 560 YOU MUST INCLUDE ALL PAGES OF THIS DOCUMENT IN YOUR ASSIGNMENT SUBMISSION. SUBMIT AS ONE PDF DOCUMENT. EXPOSE ADJUSTED TRIAL BALANCE 12/31/17 cash 1721.50 Dr Acont Receivable 124.000 Allowance for SOUDU accounts 11,000 Short term Ates Receivable 150.000 Supplies 155.000 inventory 16 000 FG uvement 175.000 BONEINS 1500 000 Accumulated Depreciation 132.000 Copyright 194,000 Accounts Payable DALIdends Payable 155.000 Interest Payable 30300 Uneamed Revenue 10 000 ST Notes Payable 12.500 IT Mortgage payable 1296200 Bonds payable 1300.000 Premium on bonds Payable 22,47 common STOCK -5,25 par 1106,250 Paid in capital in Excess of Par-CS 190, 750 Preferred STOC - 35. Par Paid in Capital I EXCOSS of Paris! Treasury Stock 1550 Retained earnings 3,500 Dividerid 5 1257,000 Sales Keenue 404,160 Sales Returns 3 Allowances 1000 Sales discounts cost of Goods sold 46.000 Bad Debt Expense 15.000 Depreciation Expense Wases expense 161.500 Expense 125.000 SUPOS Expense . Interest Bevenue Interest Expens 34,947 Gain on sale of Equipment Income Tax Expense 146.000 Total 11655647 1,655,647 R200 16,000 115,000 5 YOU MUST INCLUDE ALL PAGES OF THIS DOCUMENT IN YOUR ASSIGNMENT SUBMISSION. SUBMIT AS ONE PDF DOCUMENT. Supplemental Questions 1. What will be the balance in the Mortgage Payable Account at Jan. 31, 2018 after the second monthly payment is made? 2. The Company is about to issue $2,000,000 of 5-year, 12% bonds. Interest will be paid semi- annually. The market interest rate for such securities is 10%. How much can The Company expect to receive from the sale (issuance) of these bonds? THIS DOCUMENT IN YOUR ASSIGNMENT SUBMISSION