Palisades Creek Statement of Retained Earnings For the quarter ended March 31, 2020
			585,300
			430,600
			135,000
			880,900
Palisades Creek Balance Sheet March 31, 2020
Assets						Liabilities and Stockholders' Equity
		Current Liabilities
546,406		Accounts payable					296,600
		Salaries payable					98,400
148,900		Unearned Revenue					50,000
652,400		Total Current Liabilities					445,000
7,250		Bonds Payable			500,000
9,550		Discount on Bonds Payable			37,194		462,806
11,400		Stockholders' Equity
1,375,906		Common Stock, $20 par value; 1,000,000 shares authorized; 19,850 shares issued and outstanding					100,000
		Retained Earnings					880,900
		Total Stockholders' Equity					980,900
512,800
1,888,706		Total Liabilities and Stockholder's Equity					1,888,706

At the end of June, the following adjustment data was assembled. Analyze and prepare ONLY the adjusting journal entries related to items A-G:

1. Record interest for the following bonds that were issued on January 1, 2020 and appear on the included post-closing trial balance. The $500,000, 5% bonds were issued at a market rate of 6% with interest payable semiannually on June 30 and December 31.
2. Ten (10) percent of the $441,510 Accounts Receivable balance are expected to be uncollectible. The Allowance for Doubtful Accounts as of June 30 has a normal balance of $9,500
3. Inventory on hand at May 31, $410,000
4. Prepaid insurance expired during the last month of the quarter, $275
5. Office supplies used during the quarter, $3,920
6. A product warranty was granted beginning June 1 on a new product the company sold in June. The warranty covers a one year period. The estimated cost is 4% of sales, which totaled $193,750 in June.
7. Rent expired during the month, $2,500
8. Depreciation is computed as follows:

Assets	Cost	Salvage Value	Acquisition Date	Useful Life in Years	Depreciation Method
Building	$600,000	$15,000	June 1, 2020	10	Double Declining Balance
Equipment	$419,500	$26,000	January 1, 2018	5	Straight line

At the end of June, the following adjustment data was assembled. Analyze and prepare ONLY the adjusting journal entries related to items A-G: A. Record interest for the following bonds that were issued on January 1, 2020 and appear on the included post- closing trial balance. The $500,000, 5% bonds were issued at a market rate of 6% with interest payable semiannually on June 30 and December 31. B.Ten (10) percent of the $441,510 Accounts Receivable balance are expected to be uncollectible. The Allowance for Doubtful Accounts as of June 30 has a normal balance of $9,500 C. Inventory on hand at May 31, $410,000 D.Prepaid insurance expired during the last month of the quarter, S275 E. Office supplies used during the quarter, $3,920 F. A product warranty was granted beginning June 1 on a new product the company sold in June. The warranty covers a one year period. The estimated cost is 4% of sales, which totaled $193,750 in June. G.Rent expired during the month, $2,500 H.Depreciation is computed as follows: Cust Salvage Acquisition Useful Life in Depreciation Years Method Building $600,000 $15,000 June 1, 2020 10 Double Declining Balance Equipment $419.500 $26,000 January 1, Straight line 2018 APPENDIX A GRADING RUBRIC