Journal Entry #1

Mason Automotive sells 20,000,000 shares at $1 par for $20 on January 1st, 2019.

Journal Entry #2

Ed Mason, the CEO, hires 4,500 employees, whom will receive a combined salary of $5 Million on a monthly basis. The employees started on January 1st and will be paid for the month of January on February 4th. Employee's withholdings are as follows: 10% for federal income taxes 5.5% for state income taxes and 9% for FICA. Record the necessary entry as of January 1st, 2019.

Journal Entry #3

On January 20th, Mason Automotive decides to purchase 100,000 shares of Treasury stock at $23 per share.

Journal Entry #4

Mason Automotive issues a bond payable on January 1st, 2019 with a face value of $100 Million at 97. The bond will have a useful life of 20 years with an interest payment of 6% (Annual Percentage Rate) due at the end of the month. Record the necessary journal entry as of January 1st, 2019.

(Note: When considering the amortization of the discount or premium, assume the straight line method is used).

Journal Entry #5

On January 1st, Mason Automotive receives $50 Million advance payment from a customer, Highland Inc., to manufacture 5,000 cars.

Journal Entry #6

Mason Automotive purchased $253 Million dollars worth of inventory on January 2nd, 2019. $87 Million was paid with cash with the remaining balance on account. Mason notes that it will use a perpetual inventory system to track inventory.

Journal Entry #7

On January 2nd, Mason Automotive shipped an order to Panther Paws Corporation. The shipping terms were FOB shipping point. The sales value of the order was $207 Million and the inventory cost was $157 Million. Assume that this sale was made on account.

Journal Entry #8

Mason Automotive pre-pays for Rent Expense for the next year of $15.6 Million on January 3rd, 2019.

Journal Entry #9

Mason Automotive purchased $5 Million dollars worth of supplies on account on January 2nd, 2019.

Journal Entry #10

Mason Automotive buys a patent from Apple for $21 Million on January 3rd, 2019. The patent has a legal life of 25 years and useful life of 20 years. Record the necessary entry as of January 3rd, 2019. Assume the patent was purchased using cash.

Journal Entry #11

Mason Automotive purchases fixed assets of $170 Million that will have a useful life of 20 years and a salvage value of $20 million on January 4th, 2019. $30 million was paid with cash with the remaining balance on account. These assets are depreciated using the straight-line method.

Prepare a balance sheet for the month of January