Journal entry

Part I: Erin Company provides home decoration services. The following transactions occurred during 2018. Prepare Journal entries for the Transactions below: January 1- Purchased a new machine for $45,000 cash. February 15 - Purchased supplies on account for $4,000. Mar. 5 - Paid S1,000 cash for supplies purchased on Feb. 15. April 1- Received $26,000 cash in advance for services to be performed monthly over the coming year. April 20- Purchased land and a building for $68,000 cash. (The building was valued at $25,000) April 30-The bank statement for April included the collection of a note receivable for the company for $450. May 1- Borrowed $55,000 cash from the bank with annual interest rate of 3.5%. May 30- Purchased inventory costing $9,800 on account from Harris Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $200 were paid in cash. June 1- Returned $1,800 of the inventory that it had purchased on May 30 because the inventory was damaged in transit. The seller agreed to pay the return freight cost. June 5- Paid the amount due on its account payable to Harris Company. (See May 30) June 20- Sold inventory to Customer X that had cost $4,000 for S6,300. The sale was on account under terms 3/10, n/45. (Sales & Cost of goods sold entries) August 4- Collected the amount due on accounts receivable from the June 20th sale. October 1- Sold inventory to Customer V that had cost $950 for $2,700 cash. Sales tax of 7% is collected. (Sales & Cost of goods sold entries) November 10- Sold the land and building for $63,000 cash (no depreciation was taken on the building). December 31- Took a physical count indicating that $2,500 of inventory was on hand at the end of the accounting period. December 31- Recognized services that were performed over the year. (See April 1) December 31- Recognized accrued interest for the year on the $55,000 borrowed from the bank. (See May 1) December 31- Adjusted the records to reflect the use of the machine purchased on January I, 2018. The machine has an expected life of five years and an estimated salvage value of $5,000. Use straight-line depreciation. December 31- Using previous sales data, Williams Company estimated their warranty claims to be 1% of total sales ($10,000). December 31- During the year, they paid $120 to fix defective merchandise of which customers filed warranty claims December 31- Estimate uncollectible accounts to be 4% of receivables, which totaled $16,000. Part II: Prepare 4 financial statements using trial balance and other information (next page). TRIAL BALANCE December 31, 2018 $37,020 Accounts Receivable Accumulated Depreciation - Bldg. Advertising Expense $32,350 18,500 126,000 Alams Sales Allowance for Doubtful Accounts Bonds Payable Building Cash $2,985 50,000 125,000 229,710 90,000 Common Stock Cost of Goods Sold Credit Card Expense Depreciation Expense Discount on Bonds Payable 64,620 2,320 4,275 600 17,500 Dividends Employee Income Tax Payable Equipment FICA - Medicare Tax Payable FICA - Social Security Tax Payable Interest Expense Land 1,400 9,000 240 960 9,693 25,000 75 8,680 Maintenance Eense Merchandise Inventory Monitoring Service Revenue Note Payable Office Supplies Expense Payroll Tax Expense Petty Cash Preferred Stock Retained Eamings Salaries Expense Sales Tax Payable Supplies Supplies Expense Uncollectible Accounts Expense Unemployment Tax Payable Utilities Expense 125,000 85,017 15 8,145 100 52,000 124,816 96,000 1,050 190 520 1,993 945 6,100 27,000 2,520 Van Warranty Expense Warranty Payable Total 1,813 $694,576 $694,576 Journal Entries CREDIT DATE ACCOUNTS DEBIT Jan 1 Feb 15 Mar 5 Apr1 Apr 20 Apr 30 May 1 May 30 Jun I Jun 5 June 20 Aug 4 Oct 1 Nov 10 Journal Entries (Part 1. con't) DEBIT CREDIT DATE ACCOUNTS Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 June