Problem 11. (Total points 35) New Living Department Stores opened for business on February 1, 2020. Transactions and events during February 2020 were as follows. Prepare journal entries for each of the following transactions. The company accounts include the following: Cash, Accounts Receivable, Inventory, Equipment, Accumulated Depreciation Equipment, Accounts Payable, Wages Payable, Utilities Payable, Interest Payable, Notes Payable, Common Stock, Additional Paid-In Capital, Retained Earnings, Sales Revenue, Cost of Goods Sold, Wages Expense, Depreciation Expense, Utilities Expense, and Interest Expense

a. February 1: Receives $200,000 from a private offering of 10,000 New Living shares of $1 par value common stock.

b. The firm borrowed $100,000 from a B of A to finance the purchases. The bank loan bears interest at a rate of 12% each year and is repayable with interest on February 1, Year 2020.

c. February 1: Purchased with cash display counters and computer equipment for $60,000.

d. During February: Purchased merchandise on account totaling $217,900.

e. During February: Sold merchandise costing $162,400 to various customers for $62,900 cash and $194,600 on account. The

Problem 11. (Continued) New Living company accounts include the following: Cash, Accounts Receivable, Inventory, Equipment, Accumulated Depreciation Equipment, Accounts Payable, Wages Payable, Utilities Payable, Interest Payable, Notes Payable, Common Stock, Additional Paid-In Capital, Retained Earnings, Sales Revenue, Cost of Goods Sold, Wages Expense, Depreciation Expense, Utilities Expense, and Interest Expense

f. During February: Paid to employees wages totaling $32,400 for services rendered during the month.

g. During February: Paid utility (electric, water, gas) bills totaling $2,700 for services received during February 2020.

h. During February: Collected $84,600 from customers for sales on account (see transaction (e) above)

i. During February: Paid invoices from suppliers of merchandise (see transaction (d) above) with an original purchase price of $210,000.

Problem 11. (Continued) New Living company accounts include the following: Cash, Accounts Receivable, Inventory, Equipment, Accumulated Depreciation Equipment, Accounts Payable, Wages Payable, Utilities Payable, Interest Payable, Notes Payable, Common Stock, Additional Paid-In Capital, Retained Earnings, Sales Revenue, Cost of Goods Sold, Wages Expense, Depreciation Expense, Utilities Expense, and Interest Expense

j. February 28: Wages that employees earned during the last several days in February and that the firm will pay early in March 2020 totaled $6,700.

k. February 28: Utility services that the firm used during February and that the firm will not pay until March 2020 totaled $800.

l. February 28: The display counters and computer equipment purchased in transaction (c) have an expected useful life of five years and zero salvage value at the end of the five years. The firm depreciates equipment on a straight-line basis over the expected life and uses an Accumulated Depreciation account.

m. February 28: The firm recognizes an appropriate amount of interest expense on the loan in transaction (b) above.

n. February 28: New Living declared and paid a $500 cash dividend.