You have decided to start a business. You form a corporation, The Company.

You (the shareholder) paid $100 per share for 5,000 shares of stock on January 1, 2019.

The Company will finance an acquisition by selling a bond. On January 1, 2019, The Company sold a ten-year, $500,000 bond with a 5% coupon rate. At the time of the sale current interest rates were 6%. The bond makes the annual payment on December 31 of each year.

The Company purchased Megans Company. The following information is available for Megans Company on the day of the purchase:

Accounts Receivable 290,000 Accounts Payable 50,000

Inventory 200,000 Note Payable 100,000

Building 150,000 Common Stock 200,000

Accum. Depr. (50,000) Retained Earnings 240,000

The Company estimates that the Accounts Receivable are worth $275,000, the inventory is worth $250,000 (100 things at $2,500 each), and the building is worth $300,000. Everything else is worth its book value. The Company will pay $700,000 for Megans Company.

Collected $200,000 on accounts receivable.

Paid $25,000 on accounts payable.

Purchased 100 things at $3,000 each with cash.

Sold 150 things for $5,000 each, 90% down.

Paid wages of $75,000.

The building is expected to last 20 years with a $50,000 salvage value.

The Company wrote off $12,000 due to a customer bankruptcy.

Made the $10,000 principal payment on the note plus 4% interest.

Made the annual payment on the bond.

The Company uses FIFO.

The Company expects 3% of receivables to be uncollectable.

The tax rate is 30% and the current year taxes will be paid next year.

Prepare journal entries, T accounts, and a balance sheet only.