Required information

One Product Corp. (OPC) incorporated at the beginning of last year. The balances on its post-closing trial balance prepared on December 31, at the end of its first year of operations, were:

Cash	$	19,760
Accounts Receivable		8,340
Allowance for Doubtful Accounts		1,055
Inventory		14,440
Prepaid Rent		1,940
Equipment		45,400
Accumulated Depreciation		4,440
Accounts Payable		0
Sales Tax Payable		500
FICA Payable		600
Withheld Income Taxes Payable		500
Salaries and Wages Payable		1,600
Unemployment Tax Payable		300
Deferred Revenue		4,500
Interest Payable		533
Note Payable (long-term)		23,700
Common Stock		18,200
Additional Paid-In Capital, Common		20,022
Retained Earnings		17,930
Treasury Stock		4,000

The following information is relevant to the first month of operations in the following year:

• OPC sells its inventory at $150 per unit, plus sales tax of 6%. OPCs January 1 inventory balance consists of 180 units at a total cost of $14,440. OPCs policy is to use the FIFO method, recorded using a perpetual inventory system.
• The $1,940 in Prepaid Rent relates to a payment made in December for January rent this year.
• The equipment was purchased on July 1 of last year. It has a residual value of $1,000 and an expected life of five years. It is being depreciated using the straight-line method.
• Employee wages are $4,000 per month. Employees are paid on the 16th for the first half of the month and on the first day of the following month for the second half of each month. Withholdings each pay period include $250 of income taxes and $150 of FICA taxes. These withholdings and the employers matching contribution are paid monthly on the second day of the following month. In addition, unemployment taxes of $50 are accrued each pay period, and will be paid on March 31.
• Deferred Revenue is for 30 units ordered and paid for in advance by two customers in late December. One order of 25 units is to be filled in January, and the other will be filled in February.
• Notes Payable arises from a three-year, 9 percent bank loan received on October 1 last year.
• The par value on the common stock is $2 per share.
• Treasury Stock arises from the reacquisition of 500 shares at a cost of $8 per share.

January Transactions

1. On 1/01, OPC paid employees salaries and wages that were previously accrued on December 31.
2. A truck is purchased on 1/02 for $10,000 cash. It is estimated this vehicle will be used for 50,000 miles, after which it will have no residual value.
3. Payroll withholdings and employer contributions for December are remitted on 1/03.
4. OPC declares a $0.50 cash dividend on each share of common stock on 1/04, to be paid on 1/10.
5. A $1,035 customer account is written off as uncollectible on 1/05.
6. On 1/06, recorded sales of 175 units of inventory on account. Sales tax is charged but not yet collected or remitted to the state.
7. Sales taxes of $500 that had been collected and recorded in December are paid to the state on 1/07.
8. On 1/08, OPC issued 300 shares of treasury stock for $2,400.
9. Collections from customers on account, totaling $18,021, are recorded on 1/09.
10. On 1/10, OPC distributes the $0.50 cash dividend declared on January 4. The companys stock price is currently $5 per share.
11. OPC purchases on account and receives 70 units of inventory on 1/11 for $3,920.
12. The equipment purchased last year for $45,400 is sold on 1/15 for $46,800 cash. Record depreciation for the first half of January prior to recording the equipment disposal.
13. Payroll for January 1-15 is recorded and paid on 1/16. Be sure to accrue unemployment taxes and the employers matching share of FICA taxes.
14. Having sold the equipment, OPC pays off the note payable in full on 1/17. The amount paid is $24,330, which includes interest accrued in December and an additional $97 interest through January 17.
15. On 1/27, OPC records sales of 30 units of inventory on account. Sales tax is charged but not yet collected or remitted.
16. A portion of the advance order from December (25 units) is delivered on 1/29. No sales tax is collected on this transaction because the customer is a U.S. governmental organization that is exempt from sales tax.
17. To obtain funds for purchasing new equipment, OPC issued bonds on 1/30 with a total face value of $107,000, stated interest rate of 5 percent, annual compounding, and six-year maturity date. OPC received $96,800 from the bond issuance, which implies a market interest rate of 7 percent.
18. On 1/31, OPC records units-of-production depreciation on the vehicle (truck), which was driven 2,000 miles this month.
19. OPC estimates that 2% of the ending accounts receivable balance will be uncollectible. Adjust the applicable accounts on 1/31, using the allowance method.
20. On 1/31, adjust for January rent expired.
21. Accrue January 31 payroll on 1/31, which will be payable on February 1. Be sure to accrue unemployment taxes and the employers matching share of FICA taxes.
22. Accrue OPCs corporate income taxes on 1/31, estimated to be $5,740.

Prepare all January journal entries and adjusting entries for items (a)-(v). Review the 'General Ledger' and the adjusted 'Trial Balance' Tabs to see the effect of the transactions on the account balances. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Credit Date Jan 01 General Journal Salaries and Wages Payable Cash Debit 1,600 1,600 Jan 02 10,000 Vehicles Cash 10,000 3 Jan 03 FICA Payable Withheld Income Taxes Payable Cash 600 500 1,100 4 Jan 04 4,500 X Dividends Dividends Payable 4,500 Jan 05 1,035 Allowance for Doubtful Accounts Accounts Receivable 1,035 Jan 06 27,825 Accounts Receivable Sales Tax Payable 1,575 26,250 Sales Revenue Jan 06 Cost of Goods Sold Inventory 8 Jan 07 500 Sales Tax Payable | Cash 500 Jan 07 500 Sales Tax Payable Cash 500 Jan 08 2,400 Cash Treasury Stock 2,400 Jan 09 18,021 Cash Accounts Receivable 18,021 Jan 10 Dividends Payable Cash Jan 11 3,920 Inventory Accounts Payable 3,920 Jan 15 Accumulated Depreciation Equipment Depreciation Expense 14 Jan 15 Cash Accumulated DepreciationEquipment Jan 16 2,000 Salaries and Wages Expense Payroll Tax Expense FICA Payable Withheld Income Taxes Payable 250 16 Jan 17 23,700 Notes Payable (long-term) Interest Payable Jan 17 23,700 Notes Payable (long-term) Interest Payable Interest Expense Jan 27 4,770 Accounts Receivable Sales Tax Payable Jan 27 4,410 X Cost of Goods Sold Inventory 4,410 X 19 Jan 29 3,750 Deferred Revenue Sales Revenue 3,750 20 Jan 29 Cost of Goods Sold 21 Jan 30 Cash Discount on Bonds Payable Bonds Payable 96,800 10,200 107,000 Jan 31 400 Depreciation Expense Accumulated DepreciationVehicles 400 Jan 31 Bad Debt Expense Allowance for Doubtful Accounts Allowance for Doubtful Accounts 24 Jan 31 1,940 Rent Expense Prepaid Rent 1,940 25 Jan 31 2,000 200 Salaries and Wages Expense Payroll Tax Expense Withheld Income Taxes Payable FICA Payable Unemployment Tax Payable 250 300 50 1,600 Cash 26 Jan 31 5,740 Income Tax Expense Income Tax Payable 5,740 Prepare all January journal entries and adjusting entries for items (a)-(v). Review the 'General Ledger' and the adjusted 'Trial Balance' Tabs to see the effect of the transactions on the account balances. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Credit Date Jan 01 General Journal Salaries and Wages Payable Cash Debit 1,600 1,600 Jan 02 10,000 Vehicles Cash 10,000 3 Jan 03 FICA Payable Withheld Income Taxes Payable Cash 600 500 1,100 4 Jan 04 4,500 X Dividends Dividends Payable 4,500 Jan 05 1,035 Allowance for Doubtful Accounts Accounts Receivable 1,035 Jan 06 27,825 Accounts Receivable Sales Tax Payable 1,575 26,250 Sales Revenue Jan 06 Cost of Goods Sold Inventory 8 Jan 07 500 Sales Tax Payable | Cash 500 Jan 07 500 Sales Tax Payable Cash 500 Jan 08 2,400 Cash Treasury Stock 2,400 Jan 09 18,021 Cash Accounts Receivable 18,021 Jan 10 Dividends Payable Cash Jan 11 3,920 Inventory Accounts Payable 3,920 Jan 15 Accumulated Depreciation Equipment Depreciation Expense 14 Jan 15 Cash Accumulated DepreciationEquipment Jan 16 2,000 Salaries and Wages Expense Payroll Tax Expense FICA Payable Withheld Income Taxes Payable 250 16 Jan 17 23,700 Notes Payable (long-term) Interest Payable Jan 17 23,700 Notes Payable (long-term) Interest Payable Interest Expense Jan 27 4,770 Accounts Receivable Sales Tax Payable Jan 27 4,410 X Cost of Goods Sold Inventory 4,410 X 19 Jan 29 3,750 Deferred Revenue Sales Revenue 3,750 20 Jan 29 Cost of Goods Sold 21 Jan 30 Cash Discount on Bonds Payable Bonds Payable 96,800 10,200 107,000 Jan 31 400 Depreciation Expense Accumulated DepreciationVehicles 400 Jan 31 Bad Debt Expense Allowance for Doubtful Accounts Allowance for Doubtful Accounts 24 Jan 31 1,940 Rent Expense Prepaid Rent 1,940 25 Jan 31 2,000 200 Salaries and Wages Expense Payroll Tax Expense Withheld Income Taxes Payable FICA Payable Unemployment Tax Payable 250 300 50 1,600 Cash 26 Jan 31 5,740 Income Tax Expense Income Tax Payable 5,740