On January 1, 2018, the general ledger of Freedom Fireworks includes the following account balances: Accounts Debit Credit non 37.000 Accounts Recoivable Inventory Buildings 135.000 Accumuiated Depreciar Accounts Accounts Payable 11 100 34,200 Retaired Eanings 156.900 $420,500 $420,500 Totals During January 2018, the following transactions occur: January 1 annually and matures in 5 vears, Payments of $2,130 are required at the end of each month for January 4 Receive $32,500 from customers on accounts receivable. January 10 Pay cash on accounts payable, $26,000. Janary erk cales for the mooth total $210.000. Sales include $66,500 rcash and $143,500 on account. The cost of the units sold is $120,000. Pay the irst mon aice to the nearest dollar. the $115,000 borrowed on January 1 January 31 The following information is available on January 31, 2018. a. Depreciation on the building for the month of January is calculated using the straight-line method.. $27,000. the time the building was purchased, the company estimated a service life of 10 years and a residual value of $4.500 of a b. remaining accounts receivable on January 31 are not past due, and 3% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable ending balance shown in the general ledger start your calculations.) Record the estimated bad debt expense c. Unpaid salaries at the end of January are $27,600. (Recognize that salaries are owed, but have not been paid yet.) d. Accrue income taxes at the end of January are $9,500. (Recognize that income taxes are due, but have not been paid yet.) Journal entry worksheet 1 2 3 4 5 6 7 8 13 Borrow $115,000 from Captive Credit Corporation. The installment note bears interest at 6% annually and matures in 5 years. Payments of $2,130 are required at the end of each month for 60 months Note: Enter debits before credits Date Account Title Debit Credit Jan 01 Record entry Clear entry View general journal Journal entry worksheet 1 2 3 4 5 6 7 8 13 Receive $32,500 from customers on accounts receivable Note: Enter debits before credits. Credit Date Account Title Debit Jan 04 Record entry Clear entry View general journal Journal entry worksheet 1 2 3 4. 5 7 8 13 Pay cash on accounts payable, $26,000 Note: Enter debits before credits Credit Date Account Title Debit Jan 10 Record entry Clear entry View general journal Journal entry worksheet > 6 1 2 3 4 5 7 8 13 Pay cash for salaries, $30,400 Note: Enter debits before credits Date Account Title Debit Credit Jan 15 Record entry Clear entry View general journal Journal entry worksheet 2 3 4 5 6 7 8 13 Record the firework sales of $210,000. Sales include $66,500 for cash and $143,500 on account. Note: Enter debits before credits. Account Title Date Debit Credit Jan 30 View general journal Record entry Clear entry Journal entry worksheet 6 3 4 7 8 13 The cost of the units sold is $120,000 Note: Enter debits before credits. Date Account Title Debit Credit Jan 30 Record entry Clear entry View general journal Journal entry worksheet 2 3 4 5 6 7 13 Pay the first monthly installment of $2,130 related to the $115,000 borrowed on January 1. Round your interest calculation to the nearest dollar. Note: Enter debits before credits. Date Account Title Debit Credit Jan 31 View general journal Record entry Clear entry Journal entry worksheet 1 3 4 5 6 7 8 13 Prepare the adjusting entry for depreciation Note: Enter debits before credits. Date Account Title Debit Credit Jan 31 Record entry Clear entry View general journal A Journal entry worksheet > 5 6 7 8 13 4 Prepare the adjusting entry for uncollectible accounts. Note: Enter debits before credits Date Account Title Debit Credit Jan 31 Record entry Clear entry View general journal Journal entry worksheet 5 6 7 10 13 Prepare the adjusting entry for salaries Note: Enter debits before credits. Account Title Debit Date Credit Jan 31 Record entry Clear entry View general journal Journal entry worksheet 1 6 7 10 11 13 Prepare the adjusting entry for income tax Note: Enter debits before credits. Date Account Title Debit Credit Jan 31 Record entry Clear entry View general journal A Journal entry worksheet 6 7 8 9 10 11 12 13 Prepare the closing entry for revenue. Note: Enter debits before credits. Date Account Title Debit Credit Jan 31 Record entry Clear entry View general journal Journal entry worksheet 6 7 8 10 11 13 Prepare the closing entry for expenses. Note: Enter debits before credits. Date Account Title Debit Credit Jan 31 View general journal Record entry Clear entry 12 Unadjusted Freedom Fireworks Multiple-Step Income Statement For the Month ended January 31, 2018 Gross profit 0 Total operating expenses C Operating income C $ O Unadjusted Freedom Fireworks Classified Balance Sheet January 31, 2018 Assets Liabilities Current Assets: Current Liabilities: Total Current Liabilities C Long-term Liabilities Total Current Assets 0 Total Liabilities C Noncurrent Assets: Stockholders' Equity Total Stockholders' Equity 0 Total Assets 0 Total Liabilities & Stockholders' Equity 0 Analyze the following for Freedom Fireworks: (a) Calculate the debt to equity ratio. If the average debt to equity ratio for the industry is 1, is Freedom Fireworks more or less leveraged than other companies in the same industry? The debt to equity ratio is: Is the company more or less leveraged than other companies? (b) Calculate the times interest earned ratio. If the average times interest eamed ratio for the industry is 20 times, is the company more or less able to meet interest payments than other companies in the same industry? The times interest earned ratio is: Is the company more or less able to meet interest payments than other companies? (c) Based on the ratios calculated in (a) and (b), would Freedom Fireworks be more likely to receive a higher or lower interest rate than the average borrowing rate in the industry