PREPARE JOURNAL ENTRIES.

1) On 1/1/2016, company borrows $2,000,000 at 12% for 8 years to finance the new construction project. Payments are due quarterly with the first due date falling on 3/31/2016. Prepare the journal entries for each quarters payment.

2) Expenditures made on the project during 2015 are as follows: 1/1/2016 of $300,000; 5/1/2016 of $400,000; 7/1/2016 of $1,100,000; 10/1/2016 of $400,000. Journalize these capital expenditures.

3) Make the adjusting entry for capitalization of interest. Put any capitalized interest in the PP&E Subledger as Work-in-Process. Company Corp has $4,500,000 of general debt outstanding at 11% during 2016.

4) On 1/1, company purchases a machine for $200,000. The machine is expected to last 10 years with no salvage value. Company also spends $4,000 to have the machine delivered and $1,000 on insurance on the machine during transit.

5) On 6/30, company spends $40,000 to improve the machines output. The machine will not last longer as a result of this improvement. Company also spends $1,000 in general maintenance on the machine.

6) Make the adjusting entry for depreciation. Company uses straight-line depreciation for all tangible assets.

7) On 1/1, company finishes developing a patent (patent 1). Company incurs $150,000 in costs to develop the patent. Legal and filing fees for the patent are $2,000. The legal and useful life of this patent is 10 years.

8) On 6/30, company purchases a patent (patent 2) for $600,000. The legal life of this patent is 10 years, but the useful life is expected to be 5 years.

9) On 12/31, the fair market value of the first patent is $200,000 and the fair market value of the second patent is $200,000. The total expected future cash flows for the first patent is $110,000 and the total future cash flow for the second patent is $300,000. Prepare the amortization and impairment entries as necessary.

10) On 1/2, company purchases another company for $320,000. The purchased company had $80,000 in cash and $200,000 in PP&E. The purchased company had no other assets or liabilities. This journal entry can be entered in the cash journal by summarizing the effect on cash of the purchase.

11) On 12/31, company finds that the fair value of the purchased company is now $290,000. Prepare any necessary journal entry for goodwill impairment or revaluation.

12) Company issues 5-year bonds on 1/1. The face amount of these bonds is $1,000,000 with a coupon rate of 6%. The bonds pay interest semiannually and yield 7%.

13) Company makes adjusting entries on 12/31. Make any adjusting entries that are necessary related to the bonds.