Journal entries needed
imulation Saved a. Included in OTP's January 1 Accounts Recelvable balance is a $1.500 balance due from Jeff Letrotski. Jeff is having cash flow problems and cannot pay the $1,500 balance at this time. On 01/01, OTP arranges with Jeff to convert the $1,500 balance to a six month note, at 12% annual interest. Jeff signs the promissory note which indicates the principal and all interest will be due and payable to OTP on July 1 of this year b. OTP paid a $500 insurance premium on 01/02, covering the month of January, the payment is recorded directly as an expense. OTP purchased an additional 150 units of inventory from a supplier on account on O105 at a total cost of S900 with terms n30 d OTP paid a courier $300 cash on O1/05 for same-day delivery of the 150 units of inventory e. The 30 units that OTP's customer paid for in advance in December are delivered to the customer on 01/06 f On 01/07 OTP received a purchase allowance of $1.350 on account, and then paid the amount necessary to settle the balance owed to the supplier for the 1/05 purchase of inventory (in c), g Sales of 40 units of inventory occuring during the period of 01/07-0110 are recorded on 01/10. The sales terms are n/30. h Collected payments on 01/14 from sales to customers recorded on 01 L OTP paid the first 2 weeks' wages to the employees on 01/16. The total paid is $22 / Wrote off a $1,000 customer's account balance on 01/18. OTP uses the allowance method, not the direct write-off method k Paid $2.600 on 01/19 for December and January rent. See the earlier bullets regarding the December portion. The January portion Paid $2.600 on 01/19 for December and January rent. See the bullets expire soon, so it is charged directly to expense L OTP recovered $400 cash on 01/26 from the customer whose account had previously been written off on 0118 m. An unrecorded $400 utlity bill for January arrived on 01/27 It is due on 02/15 and will be pald then. n Sales of 65 units of Inventory during the period of 01/10-01/28, with terms n/30. are recorded on 01/28 o Of the sales recorded on 01/28, 15 units are returned to OTP on 01/30. The Inventory is not damaged and can be resold. OTP charges sales returns directly against Sales Revenue p. On 01/31, OTP records the $2.200 employee salary that is owed but will be pald February 1 q OTP uses the aging method to estimate and adjust for uncollectible accounts on 01/31. All of OTP's accounts receivable fall into a single aging category, for which 8% determining the appropriate adjustment.) is estimated to be uncollectible. (Update the balances of both relevant accounts prior to r. Accrue interest for January on the note payable on 01/31 s Accrue Interest for January on Jeff Letrotsk's note on 01/31 (see a) Gener Ledger Trial Balance Income Statement of Retained Balance Sheet Analysis
