Freshies hired a new bookkeeper this year who overstated her abilities. She is proficient in running the accounting software but has little understanding of double entry bookkeeping or GAAP principles. You have obtained the following additional information: Create journal entries and T accounts for the following information.

1. Equipment was purchased on June 1, 2021, for $74,820 cash. The equipment was delivered and installed on July 1, 2021. The $1,180 cost to install the equipment was recorded to miscellaneous expense. Management estimates that the equipment has a salvage value of $10,000 and a useful life of 5 years.

2. The investment account was earning revenue at annual rate of 5%. Interest is being compounded semi-annually and has not yet been recorded for 2021. Hint: any easy way to calculate this in Excel is to use the FV function to calculate the FV of the investment when interest is being compounded semi-annually.

3. Amounts due from customers totaled $52,580 at 12.31.21.

4. Freshies records bad debt using the percentage of accounts receivable method. The company estimates bad debt at 4%.

   The bookkeeper recorded and posted bad debt expense inaccurately on December 31, 2021.

5. Freshies was issued a $121,000 note payable on January 1, 2020, with a maturity date of January 1, 2025. The note incurs interest at 6% annual rate. The annual blended payments of $28,724.96 are due on January 1. The first payment was paid

   on January 1, 2021. a. Create a full five-year amortization schedule (include it on your ADJEs Proof tab next to ADJE 5) to calculate what

   portion of the $28,724.96 annual payment is interest expense and what part will go towards paying down the principal in order to record the adjusting entry. Reminder to analyze current versus noncurrent liability classifications.

   b. Create a schedule that proves the $28,724.96 annual payment is accurate.

6. Freshies purchased its only patent, that will maintain mint flavor longer, on March 31, 2021. The patent will be amortized

   over 10 years on a straight-line basis.

7. In reviewing the books youve discovered that in the prior year the former CPA failed to accrue $3,000 in utilities expense at

   12.31.20. The new bookkeeper recognized and recorded the expense in 2021 as soon as the error was discovered and paid.

   Ignore income taxes.

8. On September 1, 2021, Freshies bought land for $200,000 in an area it believed it could sell the land in a few years for a

   profit.

9. Goodwill relates to a small candy packaging business in Duxbury that Freshies purchased to support the packaging and

   distribution of mints. Freshies has determined the fair value of goodwill is now $5,000 less than the book value.

10. Unpaidinvoicesforinventorytotaled$63,529and$35,820onDecember31,2021,and2020,respectively.Freshiesutilizes

    the perpetual inventory method.

11. Freshiesinstallednewbricksidewalksandastoneretainingwallinfrontofthesalesshop.Thecostoftheproject,$56,320,

    was completed on December 31, 2021, and was expensed to yard expenses.

12. Depreciationonfurnitureandfixtureswas$51,804for2021.

13. AllemployeesarepaidweeklyonFriday.Theaveragepayrollis$3,344fora5-dayworkweekMondaythroughFriday.

    Employees were last paid on Friday, December 31, 2021, for the week ended December 24, 2021. Freshies has a policy of giving all employees paid holidays for Christmas day and the following day. Round to the nearest dollar and ignore payroll taxes.

14. IncludedinthecashaccountaretwoshortterminvestmentsFreshiespurchasedin2021,$30,000withamaturitydate6 months from the date of purchase, and $5,000 with a maturity date 2 months from the date of purchase.

15. $17,000waspaidonDecember1,2021,tocoverrentfor2022.

16. Freshieshasmadeestimatedincometaxpaymentsof$10,000perquarterforthefirstthreequartersof2021.Freshies

    estimated tax rate is 10%.

17. Anadditional10,000sharesofstockwereissuedonDecember31,2021.Thecompanyreceived$8,000incash.The

    issuance of these shares was properly recorded on the issue date.