PA10-2 Recording and Reporting Current Liabilities with Evaluation of Effects on the Debt-to-Assets Ratio [LO 10-2, LO 10-5) Jack Hammer Company completed the following transactions. The annual accounting period ends December 31 Apr. 30 Received $750,000 from Commerce Bank after signing a 12-month, 7 percent, promissory note. June 6 Purchased merchandise on account at a cost of $85,000. (Assume a perpetual inventory system.) July 15 paid for the June 6 purchase. Aug. 31 Signed contract to provide security service to a small apartment complex starting in September, and collected six months' fees in advance amounting to $30,000. Dec. 31 Determined salary and wages of $50,000 were earned but not yet paid as of December 31 (ignore payroll taxes). Dec. 31 Adjusted the accounts at year-end, relating to interest. Dec. 31 Adjusted the accounts at year-end, relating to security Service. Required: 1. & 2. Prepare journal entries for each of the transactions through August 31 and adjusting entries required on December 31 3. Show how all of the liabilities arising from these items are reported on the balance sheet at December 31 Complete this question by entering your answers in the tabs below. Red 1 and 2 Reg 3 Prepare Journal entries for each of the transactions through August 31 and adjusting entries required on December 31. (Do not round Intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required in the first account field.) Journal entry worksheet 3 4 5 6 Record the borrowing of $750,000 Req 1 and 2 Req 3 Prepare journal entries for each of the transactions through August 31 and adjusting intermediate calculations. If no entry is required for a transaction/event, select "No View transaction list X 1 Record the borrowing of $750,000. 2 Record the purchase of inventory worth $85,000 on account 3 Record the payment for inventory in full. 4 Record the collection of six month's security service fees in advance amounting to $30,000. 2 it Cre 5 Record the wages earned, but not yet paid as of December 31. 6 Record the adjusting entry relating to interest. Note : journal entry has been entered Record entry Clear entry View general Req3 JA HULU LE OLLUVIL BL year - CAGLIS LALEI ESL. Dec. 31 Adjusted the accounts at year-end, relating to security service. Required: 1. & 2. Prepare journal entries for each of the transactions through August 31 and adjusting 3. Show how all of the liabilities arising from these items are reported on the balance s Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Show how all of the liabilities arising from these items are reported on the balance sheet at Deo intermediate calculations.) JACK HAMMER COMPANY Balance Sheet (partial) At December 31
