You are the accountant of LTY, Inc., a company dedicated to the sale and manufacture of parts for industrial machinery. LTY closes its books on December 31 of each year, uses a system of perpetual inventory and the net method of accounting for accounts per collect and payable.

You are in charge of ensuring that the financial statements of the company are published correctly in accordance with US GAAP and on a timely basis, no later than March 30, 2022. Although the closing of the books occurred on December 31, 2021, the preparatory work and compliance with standards continue to the date of publication. Some events that could affect the 2021 financial statements are summarized below of LTY, Inc.:

1. On November 1, 2021, LTY purchased 2,000 units of inventory on credit at $500 each one. The terms of the invoice were 2/10, n/90. On November 9, 2021, he paid 20% of the debt. On January 20, 2022, LTY agreed with the supplier to pay half of the balance due in cash and the other half in common stock of the company. Stocks have value $1 pair.

2. On November 30, 2021, you received $32,000 from Banco del Pueblo in exchange for signing a 3-month promissory note for $35,000 without stipulated interest.

3. On February 15, 2022, LTY received notice that a former employee is sued by the company for unfair dismissal. The dismissal occurred on December 21, 2021. legal advisers for the company inform him that the ex-employee is likely to win the case so they recommend reaching an agreement as soon as possible to avoid too much press negative. The amount to be paid is estimated between $700,000 and one million.

4. On January 1, 2020, LTY issued a three-year note payable, with annual interest stipulated (stated interest rate) of 8% and with a principal (maturity value) of $30,000 in exchange of a team. At the time of the transaction, the market value of the property could not be determined equipment or the document. However, the equipment had a seller's book value of $12,000. The company charged an interest rate of 12% to the loan.

5. On December 1, 2021, LTY issued bonds with a principal (maturity value) of $100,000 and a established interest of 10% at its par value plus accrued interests. The bonds were originally dated November 1, 2021 and expire on November 1, 2026 with interest payable on November 1 and May 1.

6. On December 31, 2021, the LTY corporation issued $100,000 in bonds at 12%, for 5 years. The bonds pay interest every six months on July 1 and January 1. present value of the bonds at the time of issuance was $86,580. In addition, the business incurred $5,000 of issuance costs. The effective market rate was 16%.

7. On January 5, 2022, LTY learned that one of its competitors is selling a product over which LTY has exclusive rights to sell. LTY filed a lawsuit against the competitor and, in all probability, his lawyers considered that he will be able to recover at least $1,500,000.

TASK: Make a general journal (general journal) using the following 4 titles: # transaction, Accounts, DR (debit) and CR (credit)

TRANSACTIONS:

1. Necessary adjustment on 12/31/2021 related to the credit purchase of November 1,2020.

2. Adjustment entry on 12/31/2021 related to loan on November 30, 2021.

3. Journal entry for the former employee's claim.

4. Necessary adjustment on 12/31/21 related to the promissory note dated January 1, 2021.

5. Adjustment required on 12/31/21 related to bonds issued on December 1, 2021

6. Journal entry to record the bond issue on December 31, 2011.

7. Journal entry for the claim against the competitor.