Task #1 The following events occurred in December. Please record all necessary journal entries. If no entry is required, write "no entry required". E1. On December 1, Toys2Learn completes the purchase of certain assets of Learning Toys, a rival merchandiser in bankruptcy. The agreed purchase price is $850,000. At completion, Toys2Learn pays $100,000 in cash and $750,000 in stock, which has a current market price of $25 a share. The payment is in consideration of the following: Customer lists worth $240,000 and with a useful life of 4 years: The trade name "Learning Toys" with an attributed cost of $100,000; and A warehouse in Phoenix, AZ with a current market value of $240,000 and a remaining useful life of 10 years The remaining amount of the purchase price is goodwill. E2. On December 2, Toys2Learn takes delivery of a new packaging machine. The accompanying invoice shows that the agreed price is $75,000 and that payment is due within 15 days. The machine has a useful life of 15 years and a salvage value of $15,000. Before placing the machine into service, Toys2learn incurs the following costs: The machine is installed by a service team from the manufacturer; the bill for this installation is $3,000 Shipping and duty for the machine was $1,000, payable by the purchaser, E3. On December 3, Toys2Learn receives an order from a franchisee. The order is for 400 Compendium board games. The board games are priced at $20 each, plus shipping, Toys2Learn has 150 board games in stock and will be able to ship them in two days. In order to fill the order, Toys2learn orders a further 250 board games from a supplier at a cost of $10 each; these board games will ship to Toys2learn on December 4 E4. On December 3, Toys2Learn signs a training contract with one of its franchisees for a total value of $10,000. The contract requires that 50% be paid upon the signing of the contract, with the balance due upon the completion of Toys2Learn's training seminar. The boutique pays the amount due upon the signing of the contract. The work will start on December 15 and take two weeks ES. On December 4, Toys2learn's supplier ships the 250 board games, the terms on the accompanying Invoice are 2/10, net 30, FOB shipping point. E6. On December 5, the warehouse reports the following inventory movements: . the 250 board games are received, as ordered on December 3; 200 Build toys are shipped out to three Toys2learn-owned stores; these toys sell at $30 each and have an inventory cost of $10 each; the 400 Compendium board games are shipped out to the franchisee. The inventory cost of the games is $10 each. These jackets had been ordered by the franchisee on December 3. The terms of the sale are 3/10, net 30. a franchisee returns goods purchased on account in November for $3,500 and with an inventory cost of $1,200 E7. On December 5, Toys2learn signs an agreement to engage a digital media agency for six months at a cost of $1,500 a month. A month's fees are due upon the signing of the contract. The agency will commence their work on January 1. E8. On December 7, Toys2Learn signs the lease on a new store and pays the landlord a one-month deposit plus the first and last month's rent in advance. The five year lease will commence on January 1, 2018 and will cost $2,000 a month. E9. On December 8, Toys2Learn receives an invoice for the 2018 insurance premium; payment of $800 is due within 20 days. E10. On December 8, Toys2Learn visits the Toy Expo in Los Angeles and purchases 300 Sketchy Sets from Maverick (a supplier) for $1,500. An upfront payment of $300 is paid in cash; the remainder is purchased on account with terms 2/10, net 30. E11. On December 9, the franchisee confirms that they have received the 400 Compendium board games shipped on December 5. The shipper has sent you an invoice for the shipping the amount is $500. E12. On December 10, Toys2Learn returns $500 of goods to Maverick. E13. By the 15th of the month, franchisees are required to pay their monthly franchise fee based on their prior months' net sales, as self-reported by the franchisees. The final report of the prior month's net sales are automatically (electronically) submitted by the franchisees' point-of-sale systems on the 10th day of the month. Today's reports indicate that franchisees had net sales of $500,500 in November. E14. On December 11, Toys2Learn issues 10,000 shares of no par common stock at a price of $22 per share. E15. At its Board meeting on December 14, the Board authorizes the following: 100,000 additional shares of no par common stock. The current trading price of the common stock is $20 per share. (Note: As of November 30, Toys2Learn had 1,000,000 shares of no-par common stock authorized; 450,000 shares were issued and outstanding Toys2learn also had 100,000 shares of $10 par preferred stock authorized, of which 50,000 shares of preferred stock are outstanding.): A share buyback plan to buy back up to $1,000,000 of common stock in the open market; A proposal to issue $100,000 worth of 6% bonds payable. Declares a dividend of $0.25 for each common share and $1 for each preferred share outstanding as of a record date of December 5th. There are no preferred dividends in arrears. Payment date is January 2, 2018 The increase of the CEO's annual salary from $500,000 to $600,000 per annum effective December 1, 2017; Management to begin the purchase negotiations of a new headquarters for up to $900,000; and The hiring of a CFO; the CFO will earn $240,000 per annum and will start on January 1, 2018. On the signing of the employment contract, the CFO will receive a $30,000 signing bonus. E16. On December 14, Toys2Learn pays the balance of the amount due to Maverick E17. On December 15, all the checks from the franchisees for November's franchise fees are received in the day's mail. E18. On December 15, Toys2Learn issues 20,000 shares of common stock at a price of $22 per share. E19. On December 18, the CFO-designate signs her employment contract and receives her signing bonus. E20. On December 23, Toys2Learn pays the following items in their accounts payable ledger: $ 2,500 for 250 Compendium board games received December 5; $ 500 for the shipping invoice received December 9; $ 800 for the 2018 insurance premium $3,000 for the installation of the new equipment received December 2: $ 1,000 for the shipping and duty of the new equipment received December 2; $3,000 for January's rent on Toys2Learn's administrative offices; and $ 7,029 of other accounts payable. E21. On December 24, the accounting department closes for a week for the holidays