JOURNALIZING THE BUSINESS TRANSACTIONS During 2020, the following events of Reid Supply Corp. occurred. Journalize the following transactions for the company. Assuming it uses a perpetual inventory system, fiscal year December 31 1 a 1, the company issued bonds with a face value of $1,000,000. The bonds carry a stated interest of 7% payable each January 1, Prepare the journal entry for the issuance assuming the bonds are issued at 97 2, on Jan. 1. the company issued 9%, 5-year bonds with a face amount of $900,000 at par. Interest is payable semiannually on June 30 and December 31. Prepare the entries to record the issuance of the bonds and the first semiannual interest payment. 3. Reid Supply owns equipment that cost $110,000 when purchased on Jan. 1, 2017. It has been depreciated using the straight-line method based on estimated residual value of $10,000 and an estimated useful life of 5 years. Prepare journal entries to record the sale of the equipment in these two independent situations: (a) Sold for $56,000 on Jan. 1. 2020 (b) Sold for $22,000 on Jan.1, 2020 4. Jan. 5, the company purchased an equipment at cost $200,000 plus the $2,000 installation fee. 5. Jan. 6, the company had 60,000 ordinary shares with a $1 par value issued and outstanding. it re- Issued 20,000 ordinary shares for $400,000 6. Reid Supply had an inventory of 15 backpacks at a cost of $20 each on May 1. It purchased 80 backpacks at $20 each from Hunter on May. 4, terms 2/10, n/30 7. May 6, the company received credit of $120 for the return of 6 backpacks purchased on May 4 that were defective. 8. Mar. 9. Fillmore gave Reid Supply a 60-day, 9% promissory note for $6,000. Fillmore honors the note on May 9. Record the collection of the note and interest by Reid Supply that no interest has beern accrued 9, Mar. 9, Fillmore gave Reid Supply a 60-day, 9% promissory note for $6,000. Fillmore dishonors the note on May 9. Record the entry that Reid Supply would make when the note is dishonored, assuming that no interest has been accrued. 10. May 9, the company sold 40 backpacks for $25 each to Oliver Books Ltd., cost of $20 each, terms 2/10, n/30. 11. May 14 Reid Supply paid Hunter in full, less discount. (question 6) 12. Jun.1 declared a cash dividend of $2 per share to shareholders of record on June 15. 13 Jun. 30 paid the $2 cash dividend. 14. Sept. 14 the company sold $55,000 of merchandise, terms 1/10, n/30. The merchandise cost $30,000 15. The customer in (question 14) returned $5,000 of merchandise. The merchandise returned cost $3,000 16. Reid Supply received the balance due within the discount period. (question 14-15) December 17. Dec. 1 Purchased 4,000 ordinary shares for the treasury for $22 per share. 18. Reid Supply has the following transactions related to notes receivable and mortgage payable during the last month of the year Dec. 1 Loaned $18,000 cash to G. Kingsley on a 1-year, 6% note. 16 Sold goods to D. Jones, receiving a S4.800, 60-day, 7% note. 31 Accrued interest revenue on all notes receivable. 19. Reid Supply issues a $3.000.000, 10%, 10-year mortgage note on December 31, 2020, to obtain financing for a new building. The terms provide for annual installment payments of $488.236. Prepare the entry to record the mortgage loan on December 31, and the first installment payment on December 31, 2021 20. Reid Supply is undecided about which basis to use in estimating uncollectible accounts. On December 31, 2020, the balance in Accounts Receivable was $680,000 and net credit sales amounted to $3,700,000 during 2020. An aging analysis of the accounts receivable indicated that $39,000 in accounts are expected to be uncollectible. Past experience has shown that about 1% of net credit sales eventually are uncollectible. Prepare the adjusting entries to record estimated bad debts expense using the (1) percentage of sales basis and (2) the percentage of receivables basis under each of the following independent assumptions: (a) Allowance for Doubtful Accounts has a credit balance of $3,200 before adjustment. (b) Allowance for Doubtful Accounts has a debit balance of $730 before adjustment