GAAP Accounting Standereds

The information below relates to activities of Pops, Inc. in 2019. Pops starts with the following initial partners: William, Lexi, and Megan. Pops develops, manufactures and sells pharmaceuticals. Below are the transactions for the year-ended 12/31/19. Please prepare the necessary journal entries and adjusting journal entries at the end of 2019, for the following transactions assuming all amounts are paid in cash, unless otherwise stated. March 15 Development and testing of Pillex begins. Employment contracts for new staff are paid in the amount of $ 360,000 ($100.000 for administrative staff and $260,000 for research staff). Additional research materials were purchased for $150,000 and utilities on the facilities were paid in the amount of $60,000 ($10,000 for admin and $50,000 for research facilities). March 15 Pops takes out a long-term note payable (for operational purposes) of $10,000,000 from U.S. Bank. The loan has a stated rate of 9% and term of 10 years. Annual payments are due on January 1st, starting on 01/01/20. They received the full loan proceeds in cash on March 15th. March 25 The price of the key ingredient (on order from Orgin, falls to $93.50 per lb. on the open market. The drop in price is considered other than temporary. April 1 Pops pays $ 1,400,000 to Hegar Construction for the production facility. April 22 Pops purchases a pharmaceutical patent from a competitor for $ 7,500,000. The patent will expire on 12/31/2026. Pops amortizes all patents using the straight- line method. They plan to use the patent until its legal life expires. All amortization adjustments are made annually (at 12/31). It has a salvage value = $0