Payable Transactions

Richmond Company engaged in the following transactions:

Purchased $16,000 of supplies from ABC Supplies on February 16. Amount due in full on March 31.

Paid for 25% of the purchased merchandise (transaction a) on February 26.

On March 31, negotiated a payment extension with ABC for the remainder of the balance from the February 16 purchase by signing a 1-year, 10% note.

Borrowed $300,000 on a 10-month, 8% interest-bearing note on April 30.

Purchased $78,000 of merchandise on June 4. Amount due in full on June 30.

Paid for the purchased merchandise (transaction e) on June 24.

Received from Haywood, Inc., on August 19 a $15,000 deposit against a total selling price of $150,000 for services to be performed for Haywood.

Paid quarterly installments of Social Security and Medicare and individual income tax withholdings, as shown below, on October 15. The Social Security and Medicare were previously recorded as expenses during the quarter and the amounts paid represent both the employee and employer shares (50% each):

Social Security taxes withheld	$185,000
Medicare taxes withheld	43,266
Federal income taxes withheld	319,000

On December 15, Richmond completed the services ordered by Haywood on August 19. Haywood's remaining balance of $135,000 is due on January 31.

Required:

Question Content Area

1. Prepare journal entries for these transactions. If an amount box does not require an entry, leave it blank.

a. Feb. 16	Accounts PayableAccounts ReceivableCashRepairs and Maintenance ExpenseSuppliesSupplies
	Accounts PayableAccounts ReceivableCashRepairs and Maintenance ExpenseSuppliesAccounts Payable
	(Record purchase of supplies on account)
b. Feb. 26	Accounts PayableAccounts ReceivableCashNotes PayableSuppliesAccounts Payable
	Accounts PayableAccounts ReceivableCashNotes PayableSuppliesCash
	(Record partial payment of supplier)
c. Mar. 31	Accounts PayableAccounts ReceivableCashInterest ExpenseNotes PayableAccounts Payable
	Accounts PayableAccounts ReceivableCashInterest ExpenseNotes PayableNotes Payable
	(Record issuance of note to cover unpaid portion of account payable)
d. Apr. 30	Accounts PayableCashFederal Income Taxes Withholding PayableInterest ExpenseNotes PayableCash
	Accounts PayableAccounts ReceivableCashNotes PayableNotes ReceivableNotes Payable
	(Record issuance of note)
e. June 4	Accounts PayableCashInterest PayableInventorySuppliesInventory
	Accounts PayableCashFederal Income Taxes Withholding PayableInterest ExpenseInventoryAccounts Payable
	(Record purchase of inventory on account)
f. June 24	Accounts PayableAccounts ReceivableInventoryInterest ExpenseSuppliesAccounts Payable
	Accounts ReceivableCashInventoryNotes PayableSuppliesCash
	(Record payment of supplier)
g. Aug. 19	Accounts PayableCashInventoryService RevenueUnearned Service RevenueCash
	Accounts PayableCashInventoryService RevenueUnearned Service RevenueUnearned Service Revenue
	(Record receipt of deposit for services not yet performed)
h. Oct. 15	Accounts PayableCashIncome Taxes ExpenseInterest ExpenseSocial Security Taxes Payable (Employee)Social Security Taxes Payable (Employee)
	Accounts PayableAccounts ReceivableInterest ExpenseInterest PayableSocial Security Taxes Payable (Employer)Social Security Taxes Payable (Employer)
	Accounts PayableCashInterest ExpenseMedicare Taxes Payable (Employee)Unemployment Taxes Expense (Federal)Medicare Taxes Payable (Employee)
	Accounts PayableAccounts ReceivableIncome Taxes ExpenseMedicare Taxes Payable (Employer)Unemployment Taxes Expense (State)Medicare Taxes Payable (Employer)
	Accounts PayableFederal Income Taxes Withholding PayableInterest PayableUnemployment Taxes Payable (Federal)Unemployment Taxes Payable (State)Federal Income Taxes Withholding Payable
	Accounts PayableCashInterest PayableNotes PayableUnemployment Taxes Expense (Federal)Cash
	(Record employer payroll taxes)
i. Dec. 15	Accounts PayableAccounts ReceivableCashInventorySuppliesCash
	Accounts PayableCashInventoryService RevenueUnearned Service RevenueUnearned Service Revenue
	Accounts PayableAccounts ReceivableService RevenueSuppliesUnearned Service RevenueService Revenue
	(Record recognition of revenue)

Question Content Area

2. Prepare any adjusting entries necessary at December 31. If an amount box does not require an entry, leave it blank.

Dec. 31	Accounts PayableCashFederal Income Taxes Withholding PayableInterest ExpenseInterest PayableInterest Expense
	Accounts PayableCashIncome Taxes ExpenseInterest ExpenseInterest PayableInterest Payable
	(Record accrued interest)