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The following transactions apply to Baker Corporation This is Baker's first year of business. 1 Borrowed $15,000 on September 1 at 8% interest with a one year term. 2 Issued $40,000 of 5 percent, five year bonds. The bonds were issued at 98. 3 Provided services to customers for $60,000. All sales were paid with cash Paid $12,000 wages to employees. Federal income tax was 10% of wages, Social 4 security was 6% of wages and medicare was 1.5% of wages Paid the payroll taxes, both the amounts withheld from the salaries plus the employer share. Federal income tax was 10% of wages, Social security was 6% of 5 wages and medicare was 1.5% of wages 6 Paid the unemployment tax which was 4.5 % of wages. 7a Baker estimated that its warranty expense would be $4,250 for the current year. During the year Blankenship paid $920 to repair merchandise that was returned by 7b customers. 8 Paid the interest and amortized the discount on the bond 9 Recorded interest on the note payable at year end. Required: Prepare the journal entries, general ledger, trial balance, income statement, statement of changes in equity, balance sheet statement and cash flow statement. The template has been provided below: 1 Borrowed $15,000 on September 1 at 8% interest with a one year term. 2 Issued $40,000 of 5 percent, five year bonds. The bonds were issued at 98. 3 Provided services to customers for $60,000. All sales were paid with cash Paid $12,000 wages to employees. Federal income tax was 10% of wages, 4 Social security was 6% of wages and medicare was 1.5% of wages Paid the payroll taxes, both the amounts withheld from the salaries plus the employer share. Federal income tax was 10% of wages, Social security was 56% of wages and medicare was 1.5% of wages 6 Accrued the unemployment tax which was 4.5% of wages. Baker estimated that its warranty expense would be $4,250 for the current year. During the year Blankenship paid $920 to repair merchandise that was 7 returned by customers. 8 Paid the interest and amortized the discount on the bond 9 Recorded interest on the note payable at year end. Assets = Cash Liabilities + Federal Income Tax Payable Equity Service Revenue FICA Tax-Soc. Sec. Tax Payable Salary Expense FICA Tax - Medicare Tax Payable Payroll Tax Expense Unemployment Tax Payable Warranty Expense Warranty Payable Interest Expense Interest Payable Note payable Bonds Payable Discount on Bonds Payable Baker Corporation Trial Balance For the Year Ended December 31, Year 1 Debit Credit Cash Federal Income Tax Payable FICA Tax - Soc. Sec. Tax Payable FICA Tax - Medicare Tax Payable Unemployment Tax Payable Warranty Payable Interest Payable Note payable Bonds Payable Discount on Bonds Payable Service Revenue Salary Expense Payroll Tax Expense Warranty Expense Interest Expense *** Must be multi step *** Baker Corporation Income Statement For the Year Ended December 31, Year 1 Baker Corporation Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 1 Baker Corporation Balance Sheet As of December 31, Year 1 Baker Corporation Statement of Cash Flows For the Year Ended December 31, Year 1
