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Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. Apr. 30 Received $660,000 from Commerce Bank after signing a 12-month,

Jack Hammer Company completed the following transactions. The annual accounting period ends December 31.

Apr. 30

Received $660,000 from Commerce Bank after signing a 12-month, 8.5 percent, promissory note.

June 6

Purchased merchandise on account at a cost of $80,000. (Assume a perpetual inventory system.)

July 15 Paid for the June 6 purchase.
Aug. 31

Signed a contract to provide security service to a small apartment complex and collected six months fees in advance amounting to $26,500. (Use an account called Unearned Revenue.)

Dec. 31

Determined salary and wages of $45,000 were earned but not yet paid as of December 31 (ignore payroll taxes).

Dec. 31 Adjusted the accounts at year-end, relating to interest.
Dec. 31 Adjusted the accounts at year-end, relating to security service.

Required:
1.

For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation. (Do not round intermediate calculations. Enter any decreases to account balances with a minus sign. Enter your answers in transaction order provided in the problem statement.)

2.

For each item, indicate whether the debt-to-assets ratio is increased or decreased or there is no change. (Assume Jack Hammers debt-to-assets ratio is less than 1.0.) (Enter your answers in transaction order provided in the problem statement.)

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