Question
Record entries from the transaction and event list provided below in proper journal entry format for the month of June and July. All interest rates
Record entries from the transaction and event list provided below in proper journal entry format for the month of June and July. All interest rates included in the transaction list are stated at an annual rate.
June
17. Leased additional warehouse space from Leasing Solutions for two years on June 1st due to expiration of the previous rental contract. $82,000 cash was paid for the new contract on this date which covers the rental fee for two years. There is no value left in the previous contract. [Adjusting Entry Required]
18. Wage expenses from January 1 June 30 $487,000. Pay this in full including your beginning balance in wages payable.
19. On June 19th, $132,000 of prepaid insurance was used.
20. On June 26th a customer that previously bought your product on account has filed for bankruptcy. He owed you $54,500. You expect to collect $0.
July
21. Your company issued 1,000, 3.2% bonds (face value of each bond is $1,000) at 97.2911 on July 1st, 2019. The bonds are due on July 1, 2024, with interest payable each January 1 and July 1. The market rate at the time of the bond issuance was 3.8 Percent. Use the effective-interest method to calculate both the interest expense and the amortization of the bond discount when each interest payment is made.
[Adjusting Entry Required]
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