lerder accounts

(The following informotion applies to the questions displayed betow.) On December 1. Year 1, John and Patty Driver formed a corporation called Susquehanna Equipment Rentals. The new corporation was able to begin operations immediately by purchasing the assets and taking over the location of Rent- tt, an equipment rental company that was going out of business. The newy formed company uses the following accounts. The corporation performs adjusting entries monthly. Closing entries are perfocmed annually on December 31. During December of its first year of operations, the corporation entered into the following transactions. aet. IIssued to John and Patty Driver 28,000 now shores in exchange for a total of 5280,000 cosh. En. 'Purchased for $192,000 all of the equipment formerly owned by Rent-t. Paid $133,000 cash and issued a fyear note poyable for $59.000. The note, plus all 12 months of acerued interest, are due November 30 , Year 2 bec. 'Paid $9,600 to Shapiro Really as three months' advance rent on the rental yard and office formerty occupied by Rent tt. anc. 4Purchased office supplies on account from Modem Oefice Co. 51,400. Paymert doe in 30 days, (These suppiles are expected to last for several months; debit the Otice Supplies asset account) Dec. * Received $8.200 cash as advance payment on equloment rental from Mckianer Contruction Company. (Credit Unearned Rental Fees) Dec. nPaid salaries of $5.000 for the first two weeks in December. Dec. I Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to $18,200, of which $12,300 was recelved in cash. enc. W Purchased on account from Earth Movers, inc. $600 in parts needed to perfon bosic maintenance on a rental tractor. Payment is due in 10 days. De 23 Collected $2.300 of the accounts receivable recorded on December 15. mec 3 Rented a backhoe to Mission Landscaping at a price of 5310 per diny, to be paid when the bockhoe is teturned. Mission Landscaping expects to keep the backhoe for about two or. three weeks. Der as Paid biweekly salaries, $5,000. anc r Paid the account payable to Earth Movers, Inc, $600 aec 73 Declared a dividend of 10 cents por share, payable on Janwary 15. Year 2. anc 20 Susquehanna Equipment Rentabls was named, along with Mission Landscaping and Colser Construction, as a co-defendant in a $29,000 Irwsuit filed on behalf of Kevin Divenport. Mission Landscaping had left the rented backhoe in a fenced construction ste owned by Collier Construction. After working hours on December 26, Davenport had climbed the fence to play on parked construction equipment. While playing on the backtioe, he fell and beoke his arm. The extent of the company's legal and financial responsbity for thes accident, if any, cannot be determined at this time. (Note: This event does not require a journal entry at this time, but may requibe disclosure in notes accompanying the statements. Dec 20 Purchased a 12 -emonth public liability insurance policy for $9,480. This policy protects the company against liability for injuries and property damage caused by its equipment. Howver, the policy goes into effect on January 1, Year 2, and aflords no coverage for the injuries sustained by Kevin Dovenport on December 26. Den. In Received a bill from Universal Utilities for the month of Decembec, 5670 . Pryment is doe in 30 days: Dec. n Equipment rental fees earned during the second hat of December amounted to 520,400 . of which $15,900 was recelved in cash. Data for Adjusting Entries in Year 1 Data for Adjusting Entries in Year 1 a. The advance payment of rent on December 1 covered a period of three months. b. The annual interest rate on the note payable to Rent-lt is 6 percent. c. The rental equipment is being depreciated by the straight-line method over a period of eight years. Any salvage value at the end of its useful life is expected to be negligible and immaterial. d. Office supplies on hand at December 31 are estimated at $650. e. During December, the company earmed $4,700 of the rental fees paid in advance by McNamer Construction Coapany on December 8 t. As of December 31, slix days' rent on the backhoe rented to Mission Landscaping on December 26 has been earned. 9. Salaries eamed by employees since the last payroll date (December 26) amounted to $1,300 at month-end. h. It is estimated that the company is subject to an income tax rate of 30 percent of profit before income taxes (total revenue minus all expenses other than income taxes). These taxes will be payable in Year 2. Mase zo oo peints Post the entries into the following ledger accounts. (Enter the transaction in chronological order for each of the Ledger acceunts. Round your final answers to the nearest whole dollar.)