Obtain and review the debt agreement on the Line of Credit with Wells Fargo. Compute and record interest expense on the amount owed on the line of credit for the month of January.

FTS intends to repay all amounts borrowed on the Wells Fargo Line of Credit on the termination date. No borrowings or repayment occurred on the line of credit during January 2019.

Obtain the schedule of property, plant, and equipment held on December 31, 2018 (Workbook on the Excel). The schedule of assets gives the monthly depreciation expense for all assets owned as of the end of 2018. Add the long-term assets purchased in January to the schedule of assets and compute the depreciation expense for the new assets for one month.

The company records depreciation and amortization expense for a full month in the first month the asset is used to produce revenue regardless of how many days the asset is actually used in the month purchased. FTS used all physical assets purchased in January 2019 during January 2019.

The trademark paid for in January has not yet been used during 2019. The company estimates a $0 residual value for all assets and useful lives by will be as follows:

Equipment 5 years; Furniture and Fixtures 7 years; Vehicles 5 years; Trademark 25 years.

The company provides high deductible health insurance coverage to all salaried employees. The policy began on May 1, 2018 and will expire on April 30, 2019. The annual insurance premium of $48,000 is paid in quarterly payments of $12,000 on May 1, August 1, November 1 and February 1.

The company also has a policy for business liability and property insurance that is paid monthly as coverage is received. See the insurance policy provided for terms and payment information on monthly coverage.

Obtain the commercial lease agreement. The company has made all payments in accordance with the agreement. Determine the amount of prepaid rent at the end of January and record the entry related to January rent.

The company has estimated that they will not collect $2,000 from customers who owe on account. Review the accounts receivable aging report and determine if the company’s estimate is reasonable.

FTS received invoices at the beginning of February (see Excel for invoices) that may relate to goods and services received in January. The invoices received late have not been recorded or paid.

At the end of January 2019, FTS employees counted all paper, office, and cleaning supplies on hand and estimated the value to be approximately $4,855.

The inventory control team counted inventory at the end of the day on January 31, 2019 and determined the cost of inventory on hand to be $35,410.

On December 28, 2018, FTS received a payment from a customer in the amount of $945 for catering services provided to the customer on January 14th, 2019.

On November 1st, 2018, FTS purchased a certificate of deposit from First National Bank for $25,000. The deposit earns interest of 2.0% annually and has a maturity end date of 11/1/2020. Interest earned is received annually on November 1st of each year.

The tax person at your firm estimated income tax expense for the month of January to be $2,500. Income tax will be paid on March 15th.

FTS paid cash dividends to shareholders in the amount of $5,000 on January 15th.

The payment was made via an automatic cash transfer to each shareholder and has not been recorded.