prepare the journal

1 2 TorontoCleanDry Inc. is a top dry cleaner in Toronto that offers services ranging from wash and press to tailoring and alterations. The company is owned by three sisters - Mandy, Lauren and Jessica Jessica decided to open a new business in Montreal with one of her friend Chloe MontrealCleanDry Inc began operations on December 1, 2021. The company has a December 31 year-end and uses Inventory perpetual method. You have been provided a listing of all transactions that occurred in the company's first month of operations. December 1 - Issued common shares for $150,000 cash December 2 - Took out a $125,000 loan with Scotia Bank @ 6% interest payable every January and the principal of the loan due December 1, 2026 December 3 - Purchased inventory on account for $125,000 from ChemicalSafe Company uses perpetual method Supplier offered 2% discount in 10 days December 4 - Purchased a dry-cleaning equipment and a delivery Truck for $22,000 and $100.000 respectively. The company signed a note with the two suppliers December 5 - Purchased cleaning supplies on account for $9,600 December 6 - Prepaid 1 year rent for the period from December 1 to November 30 for $12.000 cash December 10 - MontrealCleanDry Inc provides also commercial wash and fold for hotels. One of its customers made a deposit of $55,000 for future cleaning 3 4 5. 6 7 service 8 December 11 - Performed dry cleaning services for Westmount Hotel Inc for $124.000 One-quarter of this amount was paid in cash and the remainder was on account 9 December 12 - Paid the balance due to its supplier ChemicalSate (Ref transaction3) 10. December 13 - the company provides Laundry services for hotel continental for $25,000. The bill will be paid next January 11. December 18 - Incurred wages for 2 employees (Irene and Cindy) who worked a total of 32 hours each at an hourly rate of $15.00; these vluges will be paid on December 20 12. On December 19 morning, Jessica (the owner) tead in the newspaper that the hotel intercontinental is in financial distress. The hotel manager called her in the afternoon to ask for an extended payment. After meeting with Chlo, they decided to record a bad debt expense for $2 500 13. December 20 - Paid wages of $9,000 to employees in addition to the amount owed to Irene and Cindy 14. December 22 - Interviewed Kamala Trump, an experienced employee, to manage the store effective June 1, 2021; this position comes with a $50,000 annual salary 15 December 23 - Declared a dividend of $5,000 15. December 23 - Declared a dividend of $5,000 16 December 24 - Rented the delivery truck to Duc's Dpanneur, a business next door for the last week of the month for $2,500 cash 17 December 25 - Paid the dividends proviously declared on Dec 23 18. December 31 - Depreciation on the delivery truck is calculated based on an estimated useful 10 of 5 years using the straight-fire method Residual value $20,000 19 December 31 - Accrued the interest on any debt financing taken in the month of December 20 December 31 - Used $3,400 of the supplies in cleaning operations 21 December 31 - Recorded the rent of December 22 December 31- The company concluded that Hotel Intercontinental with accounts totaling $2,500 would be unable to pay and wrote these receivables off 23. At the end of 2021. Jessica and Chloe decided that it would use an estimate for bad debts of 1% of its credit sales. Credit sales equals 51 350,000 REQUIRED 1) Prepare all necessary journal entries and adjusting entries for the month of December 2021 (26 marks)