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P4-12. Transaction Analysis; Journal Entries, Posting, Unadjusted Trial Balance, Adjusting Journal Entries, Adjusted Trial Balance, Financial Statements, Closing Entries, Post-Closing Trial Balance. [Learning Objectives
P4-12. Transaction Analysis; Journal Entries, Posting, Unadjusted Trial Balance, Adjusting Journal Entries, Adjusted Trial Balance, Financial Statements, Closing Entries, Post-Closing Trial Balance. [Learning Objectives 3, 4, 5, 6, 7, 8, 9, 10] The Jiayin Li Corporation, which is a technology company, was formed on January 1 of the current year. Transactions completed during the first year of operation follow. January 1 January 10: Issued 1,000,000 shares of common stock for $15,000,000, which is the par value of the stock. Acquired equipment in exchange for $2,000,000 cash and a $5,000,000 note payable. The note is due in 10 years. February 10: Paid $48,000 for a business insurance policy covering the two-year period beginning on March 1 February Purchased $900,000 of supplies on account. 14: March 1: Paid wages of $195,000. March 15: Billed $2,500,000 for services rendered on account. April 3: Paid $125,000 of the amount due on the supplies purchased on February 14. April 17: Billed $2,000,000 for services rendered on account. May 1: Paid wages of $200,000. May 7: Collected $200,500 of the outstanding accounts receivable. May 8: Received bill and paid $96,500 for utilities. May 24: Paid $40,000 for sales commissions. June 4: Made the first payment on the note issued on January 10. The payment consisted of $50,000 of interest and $150,000 to be applied against the principal of the note. June 18: Billed customers for $646,000 of services rendered. June 29: Collected $450,000 on accounts receivable. July 10: Aug 25: Sept 23: Purchased $45,000 of supplies in cash. Paid $120,000 for administrative expenses. Paid $35,500 for warehouse repairs. October 1: Paid wages of $100,000. Nov 23 Dec 19: Dec 30: Purchased supplies for $500,000 on account. Collected $150,000 in advance for services to be provided in December and January of the following year. Declared and paid a $20,000 dividend to shareholders. The chart of accounts used by Jiayin Li is presented here: Chart of Accounts Group 100: Assets Account # Account Title 101 Cash 102 Accounts Receivable 103 Supplies 104 Prepaid Insurance 110 112 Equipment Accumulated Depreciation-Equipment 200: Liabilities 201 Accounts Payable 202 Deferred Service Revenue 203 Wages Payable 210 Interest Payable 220 Notes Payable 300: Stockholders' Equity 301 Common Stock 310 Retained Earnings 320 Dividends 400: Revenues 500: Expenses 401 Service Revenue 501 Wage Expense 502 Utilities Expense 503 Selling Expense 504 Administrative Expense. 505 Repairs Expense 506 510 Insurance Expense Depreciation Expense-Equipment 520 Interest Expense 600: Other 601 Income Summary
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