One Trick Pony $($ OTP $)$ Incorporated and began operations near the end of the year $,$ resulting in the following post $-$ closing balances at December $31$ : $31,29013,8007762,5006,400$ CashAccounts Receivable Allowance for Doubtful Accounts InventoryDeferred Revenue $($ units $)$ Accounts Payable Notes Payable $($ long $-$ term $)$ Common Stock Retained Earnings credit balance $24,0009,8004,970$ The following information is relevant to the first month of operations in the following year OTP will sell inventory at $ $160$ per unit OTP's January $1$ inventory balance consists of $50$ units at a total cost of $ $2,500.$ OTP's policy to use the FIFO method $,$ recorded using a perpetual inventory system In December OTP received a $ $6,400$ payment for $40$ units OTP is to deliver in January this obligation was recorded in Deferred Revenue Rent of $ $1,340$ was unpaid and recorded in Accounts Payable at December $31.$ OTP's notes payable mature in three years $,$ and accrue interest at a $10$ annual rate January Transections a Included in OTP's January $1$ Accounts Receivable balance is a $ $2\mathrm{.}400$ balance due from Jeff Letrotski Jeff is having cash flow problems and cannot pay the $ $2\mathrm{.}400$ balance at this time $.$ On $01/01$ OTP arranges with Jeff to convert the $ $2\mathrm{.}400$ balance to a month note $,$ at $10\%$ annual interest Jeff signs the promissory note $,$ which indicates the principal and all interest will be due and payable to OTP on July $1$ of this year b OTP paid $ $420$ insurance premium on $01/02$ covering the month of January the payment is recorded directly as an expense OTP purchased an additional $200$ units of inventory from a supplier on account on $01/05$ at a total cost of $ $10,000$ with terms n $/30$ OTP paid courier $ $400$ cash on $01/05$ for same $-$ day delivery of the $200$ units of inventory e The $40$ units that OTP's customer paid for in advance in December are delivered to the customer on $01/06$ On $01/07$ OTP received a purchase allowance of $ $1,600$ on account and then paid the amount necessary to settle the balance owed to the supplier for the $1/05$ purchase of inventory in c $)$ Sales of $60$ units of inventory occurring during the period of $07-01$ are recorded on The sales terms are n $30$ Collected payments on $01/14$ from sales to customers recorded on $01/10$ LOTP paid the first $2$ weeks wages to the employees on $01/16$ The total paid is $ $3\mathrm{.}080$ Wrote off a $ $880$ customer's account balance on $01/18$ OTP uses the allowance method $,$ not the direct write $-$ off method Paid $ $2\mathrm{.}680$ on $01/19$ for December and January rent See the earlier bullets regarding the December portion $.$ The January portion will expire soon $,$ so it is charged directly to expense LOTP recovered $ $340$ cash on $01/26$ from the customer whose account had previously been written off on $01/18$ An unrecorded $ $210$ utility bill for January arrived on $01/27$ is due on $02/15$ and will be paid then Sales of $70$ units of inventory during the period of $01/10-01/28,$ with terms n $/30,$ are recorded on $01/28$ the sales recorded on $01/2810$ units are returned to OTP on $01$:$30$ The inventory is not damaged and can be resold OTP charges sales returns to a contra $-$ revenue account On $01$:$31$ OTP records the $ $3,080$ employee salary that is owed but will be paid February $1$ OTP uses the aging method to estimate and adjust for uncollectible accounts on $01/31$ All of OTP's accounts receivable fall into single aging category for which $10$ is estimated to be uncollectible Update the balances of both relevant accounts prior to determining the appropriate adjustment $)$ Accrue interest for January on the notes payable on $01/31$ Accrue interest for January on Jeff Letrotski's note on $01/31($ seeM