1. Journal Entries

The following occurred during January 2020, the first month of business for Parker, Inc., a merchandising company. Use blank paper for your answer to this problem. Place (a) and (b) on separate sheets of paper.

1/01 Parker issued 50,000 shares of $5 par common stock for $300,000 cash.

1/01 Paid $6,000 for three months rent.

1/01 Purchased $80,000 furniture and fixtures for cash. The furniture and fixtures are

expected to have a useful life of five years and a residual (salvage) value of $20,000.

1/01 Hired an assistant for $3,000 per month. The assistant will be paid on the first of each

month for work performed the prior month.

1/01 Purchased $10,000 of Office Supplies on account.

1/01 Purchased $80,000 merchandise inventory on account. The account is due in 15 days. Parker uses the perpetual inventory method.

1/10 Sold inventory costing $5,000 for $7,000 cash.

1/11 Paid for Office Supplies purchased on 1/01.

1/15 Paid $4,800 for a two-year insurance policy.

1/16 Asked for an extension to pay for the inventory purchased on 1/01. The supplier accepted a 6-month 9% note in exchange for the amount due on 1/16.

1/18 Received $15,000 in advance for a special order to be delivered in February.

1/30 Received a bill for $400 for January utilities. The bill is due on February 10.

Parker prepares adjusting journal entries monthly. A count determines that $7,500 of Office

Supplies are on hand on 1/31. Parker uses the straight-line method of depreciation.

1. Prepare all necessary journal entries to record the above. If no entry is required state NA.
2. Prepare all necessary adjusting entries on 1/31.