The information below relates to activities of Pops, Inc. in 2019. Pops starts with the following initial partners: William, Lexi, and Megan. Pops develops, manufactures and sells pharmaceuticals. Below are the transactions for the year-ended 12/31/19. Please prepare the necessary journal entries and adjusting journal entries at the end of 2019, for the following transactions assuming all amounts are paid in cash, unless otherwise stated. February 10 To begin development of Pillex. Pops purchases $550,000 of equipment. Of this amount, $100,000 can be used on future research projects and the remainder will only be used to develop Pillex This equipment has a salvage value of $10,000. All equipment is put into use immediately and depreciation for the year is recorded at year-end (12/31). February 20 Orgin, Inc. is a supplier of a key ingredient in Pillex Given their unique business relationship, Pops decides to purchase 9,000 shares of Orgin. Inc. at $35 / share. This makes Pops a 40% owner of Orgin. Inc. On the same date, Pops signs a forward contract with Orgin, Inc. to buy 5,000 lbs. of the key ingredient for $100.25/1b. It will be delivered to Pops on June 25, 2019. Pops will pay the full price on delivery. March 1 Pops starts a construction project to build a production facility. On this date they pay $450,000 for architectural renderings and make the first payment to Hegar Construction in the amount of $1,200,000. Additionally, on this day, they take out a $4,000,000 construction loan (6% annual rate over 10 years, with annual payments starting on 12/31/19) from First Federal Bank. The entire loan proceeds are deposited into Popsis checking account. The construction is expected to take 7 months. Don't forget to record the receipt of ALL loan proceeds on this day. The information below relates to activities of Pops, Inc. in 2019. Pops starts with the following initial partners: William, Lexi, and Megan. Pops develops, manufactures and sells pharmaceuticals. Below are the transactions for the year-ended 12/31/19. Please prepare the necessary journal entries and adjusting journal entries at the end of 2019, for the following transactions assuming all amounts are paid in cash, unless otherwise stated. February 10 To begin development of Pillex. Pops purchases $550,000 of equipment. Of this amount, $100,000 can be used on future research projects and the remainder will only be used to develop Pillex This equipment has a salvage value of $10,000. All equipment is put into use immediately and depreciation for the year is recorded at year-end (12/31). February 20 Orgin, Inc. is a supplier of a key ingredient in Pillex Given their unique business relationship, Pops decides to purchase 9,000 shares of Orgin. Inc. at $35 / share. This makes Pops a 40% owner of Orgin. Inc. On the same date, Pops signs a forward contract with Orgin, Inc. to buy 5,000 lbs. of the key ingredient for $100.25/1b. It will be delivered to Pops on June 25, 2019. Pops will pay the full price on delivery. March 1 Pops starts a construction project to build a production facility. On this date they pay $450,000 for architectural renderings and make the first payment to Hegar Construction in the amount of $1,200,000. Additionally, on this day, they take out a $4,000,000 construction loan (6% annual rate over 10 years, with annual payments starting on 12/31/19) from First Federal Bank. The entire loan proceeds are deposited into Popsis checking account. The construction is expected to take 7 months. Don't forget to record the receipt of ALL loan proceeds on this day
