Part 1:

Below are the external transactions for Brandy Corporation. During the first month of operations, the following events and transactions occurred.

December 1^st: Issued common stock to investors in exchange for $100,000 in cash.

December 1^st: Borrowed $45,000 by issuing notes. $45,000 of notes payable are due for payment next year on December 1^st.

December 1^st: Purchased delivery trucks for $65,000 cash.

December 1^st: Paid $24,000 cash for a 2-year insurance policy starting on December 1^st.

December 5^th: Purchased supplies for $4,700 on account.

December 1st: Brandy Corporation owns a warehouse. On December 1st, it rented storage space to a tenant for 5 months for a total cash payment of $20,000 received in advance.

December 16^th: Provided services to customer X for $35,000. Customer X pays the entire amount immediately.

December 20^th: Provided services to customer Z on account for $60,000.

December 25^th: Collected $30,000 from customer Z.

December 27^th: Paid salaries of $28,000.

December 30^th: Paid a dividend of $11,000 to shareholders.

Journalize the transactions.

Part 2 : Prepare a Trial Balance. List the account titles and their balances in the appropriate debit or credit column.

Part 3:

Brandy Corporation adjusts its accounts annually. The following information is available for the year ended December 31.

Record interest expense for interest accrued on the note payable in December. Note has a 10% annual interest charge.

Record depreciation expense for December for the delivery trucks. The delivery trucks have a residual value of $5,000 and an estimated useful life of 10 years.

Record insurance expense for December.

Record supplies expense for supplies used before end of year. $1,700 supplies are left over at the end of December.

Record rent revenue for December.

For each of the above transactions, prepare the adjusting entries on December 31.

Part 4 :Prepare an Adjusted Trial Balance. List the account titles and their balances in the appropriate debit or credit column.

Part 5 : Prepare closing entries.