The following transactions took place during the month of December , 2014: Dec1:

Question

The following transactions took place during the month of December , 2014: Dec1: Paid $7500 to cover rent for December, January, February, and March. Dec2: Paid an annual premium of $ 8400 for business insurance. Dec3: Received $16500 from a customer to satisfy a balance from sales in September. Dec3: Paid $28,500 for display cases and other store fixtures. Dec5: Borrowed $20,000 from the bank, singing a 3-year, 6.9% promissory note. Dec7: Purchased $48,000 of merchandise from Gilbert Company with terms 2/10, n/30. Dec9: Purchased merchandise for $23,000 cash. Dec10: Returned damaged merchandise to Gilbert Company: received credit for $17,000. Dec10: Investors paid a total of $30,000 to purchase 20,000 shares of the company’s $.80 par value common stock. Dec10: Sold merchandise to R. J/ Anderson on account, $28,000 with terms 2/10, net/30. Dec12: Received and paid telephone bill in the amount of $425 for December service. Dec13: Completed a $9700 credit sale to Ben Jackson with terms 1/10, n/30. Dec 14: Paid the balance due to Gilbert Company. Dec 15: received $ 2000 of merchandise returned by Ben Jackson. Dec16: Purchased $ 18,000 of merchandise from Leo Company with terms 1/10, n/30. Dec17: A company that owed us $ 1,100 filed bankruptcy. The account was written off. Dec 19: Bought $530 of supplies on account. Dec 20: Sold merchandise on account to Martha Corner for $26,000, terms 2/15, n/30. Dec20: Received payment in full from Ben Jackson. Dec 24: Received a $385 bill for electricity used in December. Dec28: received a check from R.J. Anderson for payment in full. Dec28: Recorded cash sales for December totaling $ 39,650. Dec29: Paid half of the amount owed to Leo Company. December 31: Fix it up declared and paid a $.13 per share cash dividend Prepared adjusted entries, closing entries and ledgger

Explanation / Answer

Dec 1

Prepaid rene (Db) 7500
cash (cr) 7500

Dec 2
Perepaid insurance (db)8400
cash (cr) 8400

Dec 3

Cash (cr) 28500
supplies (db) 28,500

cash(db) 16500
acc rec (cr)16500

dec 5

cash(db)20,000
bank loan (Cr) 20,000

Dec 7

Inventory (db) 48,000
inventory paynble (cr) 48,000

dec 9

Inventory (db) 23,000
cash (cr) 23,000

dec 10

Invnetory (cr) 17,000
inventory paynble (db) 17,000

cash (db) 33,000
common stock (cR)0.8*20,000=16,000
additional paid in capirtal (cr)17,000

Revenue (cr) 28,000
acc rec (db) 28,000

Dec 12

cash (cr) 425
telephon exp (db) 425

Dec 13

Revenue (cr) 9700
acc rec (db) 9700

Dec 14

cash (cr) 31000*.98=30,380
Acc payable (db) 31,000
sales discount (db) 620

Dec 15th

acc rec (cr) 2000
sales return (db) 2000

Dec 16

inventory (db) 18,000
acc cpayable (cr) 18,000

Dec 17

Acc rec (cr) 1100
bad debt expense (db) 1100

Dec 19

acc payable (cr) 530
supplies (db) 530

Dec 20
revenue (cr) 26,000
acc rec (db) 26,000

cash(db) 8700*.9=7830
sales discoutn (db) 870
acc rec (cr) 8700

Dec 24
electricity expense (db) 385
cash (cr) 385

Dec 28
cash (db) 28,000
acc rec (cr) 28,000

Dec 29

cash (cr) 9000
acc payable (db) 9000

dec 28
cash (db) 399650
rebenue (cR) 39650

dec 29
cash (cr) 9000
acc payable (db) 9000

Dec 31

cash (cr) 0.13*2000=260
dividend (db) 260

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