Jim Barbi operates the Victor$$s House of Music $($VHOM$)),$ a business in which he purchases and sells all sorts of musical instruments from various branded manufacturers both domestically and internationally. He operates the business out of a small retail location in Asheville, NC along with a significant consumer direct web site business also run out of the retail location. VHOM has the opening $2023$ Trial Balance listed below. January $1,2023$ Trial Balance $$ beginning of fiscal $2023$

Footnotes:

$(1)$ The Notes Payable is a $5$ year note paid annually in installment payments on $12/31$ of each year. The annual rate on the Notes Payable is $7\%$ and the original Note was for $$3,000,000.2$ annual installment payments have been made prior to $2023$ and the $3$rd payment will be made on $12/31/23.$

See Journal Entry #$21$ for description.

Debits Credits

$1$ Cash $130,000$

$2$ Accounts Receivable $275,000$

$3$ Inventory $600,000$

$4$ Equipment $3,000,000$

$5$ Accumulated Depreciation $-$ Equipment $600,000$

$6$ Land $750,000$

$7$ Building $-$

$8$ Accounts Payable $72,000$

$9$ Salaries Payable $255,000$

$10$ Income Tax Payable $-$

$11$ Notes Payable $(1)1,920,139$

$12$ Bonds Payable $-$

$13$ Premium on Bonds Payable $-$

$14$ Common Stock $1,000,000$

$15$ Treasury Stock $-$

$16$ Retained Earnings $907,861$

$17$ Revenue $-$

$18$ Cost of Sales $-$

$19$ Salaries Expense $-$

$20$ Advertising Expense $-$

$21$ Rent Expense $-$

$22$ Utilities Expense $-$

$23$ Income Tax Expense $-$

$24$ Depreciation Expense $-$ Equipment $-$

$25$ Interest Expense $-$

$26$ Gain on Sale of Land $-$

$27$ Dividends $-$

Totals $4,755,0004,755,000$

journal entries:

Jan $1($#$1)$ Issued a $$1,000,000$ Bond at face rate of $5\%$ when market rate $=4\%.$ Bond is a $10-$year term

paid semi$-$annually on $6/30$ and $12/31.$ Need to calculate the Bond Value to perform this entry. $($Hint:

the opening trial balance includes a Premium on Bonds Payable account.$)$

Jan $5($#$2)$ Purchased Equipment for $$2,000,000$ in cash

Jan $10($#$3)-$ Paid salaries payable from $2022$ of $$255,000$

June $30($#$4)-$ Sell $$1,250,000$ of product to customers on account for $1$st half of $2023.$ Cost of Sales $=$

$$500,000.$ Note: this is a $2-$part entry.

June $30($#$5)-$ Sell $$1,875,000$ of product to customers for cash for $1$st half of $2023.$ Cost of Sales $=$

$$800,000.$ Note, this is a $2-$part entry.

June $30($#$6)-$ Collect $ $1,500,000$ in cash from customers that had been on account.

June $30($#$7)-$ Purchased $$1,600,000$ of inventory on account

June $30($#$8)-$ Paid $$900,000$ to vendors for prior accounts payable in cash

June $30($#$9)-$ Paid Salaries to employees of $$600,000$ in $1$st half of $2023$ in cash.

June $30($#$10)-$ Payment of $1$st semi$-$annual bond payment in cash, $$25,000.($Hint: will need to perform

a Bond amortization schedule to perform this journal entry.$)$

Dec $31($#$11)-$ Sell $$2,000,000$ of product to customers on account for $2$nd half of $2023.$ Cost of Sales $=$

$$800,000.$ Note, this is a $2-$part entry.

Dec $31($#$12)-$ Sell $3,200,000$ of product to customers for cash for $2$nd half of $2023.$ Cost of Sales $=$

$$1,400,000.$ Note, this is a $2-$part entry.

Dec $31($#$13)-$ Collect $$1,175,000$ in cash from customers that had been on account.

Dec $31($#$14)-$ Purchased $$1,400,000$ of inventory on account

Dec $31($#$15)-$ Paid $$600,000$ to vendors for prior accounts payable in cash

Dec $31($#$16)-$ Paid Salaries to employees for $$650,000$ in $2$nd half of $2023$ in cash.

Dec $31($#$17)-$ Paid Advertising Expense for year in cash, $$200,000$

Dec $31($#$18)-$ Paid annual rent on office facility in cash, $$186,000$

Dec $31($#$19)-$ Paid annual utilities expense in cash, $$165,000$

Dec $31($#$20)-$ Sold Land costing $$750,000$ for $$950,000$ in cash. $($Hint: the opening trial balance has aGain on Sale of Land account$)$

Dec $31($#$21)-$ Made annual installment notes payable payment of $$731,672$ in cash. $3$rd installment of

$5-$year note. $($Hint: will need to perform a Loan amortization schedule to perform this journal entry.$)$

Dec $31($#$22)-$ Payment of $2$nd semi$-$annual bond payment in cash, $$25,000.($Hint: will need to perform

a Bond amortization schedule to perform this journal entry.$)$

Dec $31($#$23)-$ Purchased Common Stock shares back from shareholders $($Treasury Stock transaction$)$

for $$250,000$

Dec $31($#$24)-$ Paid Dividends to shareholder in cash for $$224,085.$

Dec $31($#$25)$ Purchase Building for $$1,300,000$ in cash.

Dec $31($#$26)-$ Salaries earned in FY$23,$ but not paid of $$200,000$ at year$-$end.

Dec $31($#$27)-$ Depreciation on the Equipment $=$ $$125,000$ for FY$23.$

Dec $31($#$28)-$ Income Tax expense incurred of $$276,000,$ but not yet paid.

Jim has maintained meticulous transaction records, but is not familiar with how to create financial

statements for his upcoming investor $($shareholders and bondholders$)$ meeting next week to review fiscal

$2023$ results. Jim has hired you to perform the following related to VHOM$$s accounting for the fiscal

year ended December $31,2023$:

$1.$ Record all regular journal entries and adjusting journal entries. $(12$ Points$)$

Note: All of the accounts used by VHOM are listed in the opening Trial Balance. While many of

the accounts will have a zero balance to start, all accounts will be used in $2023.$