G -Because of a new product line, Accounting Creations needed some temporary add
ID: 2544318 • Letter: G
Question
G -Because of a new product line, Accounting Creations needed some temporary additional storage space so on _____3,1, 2018 they rented a unit for an annual rate of $17,000 and they paid the entire amount up front.
H -The storage building was self-constructed this year by Accounting Creations. The Company had their initial expenditure of $500,000 on January 1. They paid an additional $375,000 on May 1st, $250,000 on August 1st, and then the final payment of $150,000 on December 1st when the building was completed, and occupancy occurred. The company has decided to use S/L method for depreciation. The storage building is estimated to have a life of 40 years and a salvage value of $75615. (Enter the last four digits of your student number.) The company depreciates using partial years.
I - Accounting Creations Double Entry has two loans outstanding as of 12/31/2018. Interest is paid annually on January 1st. The facts on each loan are as follows:OnStar Bank Loan – outstanding since January 1, 2018 with a 4.0% interest rate. This loan was taken out to finance the construction of the Storage Building. Interest for the year and 10% of the principle will be paid to the bank on January 1, 2019. Except for recording the initial cash received and loan, no additional entries have been made. Cold star Bank Loan – also outstanding all of 2018 with 3.05 % interest rate Interest is due on January 1, 2019. Principle is due on January 1, 2024. Since interest will not be paid to the Bank until 2019, Accounting Creations’ office staff did not accrue any interest.
Accounting Creations was authorized to issue 3,000,000 shares of $1 par Common Stock but has only issued 650,000 shares of common stock as of 12/31/2018. No new shares were issued during 2018.
1. On the “Adjusting Journal Entries” worksheet, prepare in journal entry form all adjusting and correcting journal entries based on the following information. All information was provided to you as of 12/31/2018. (Round all numbers to the nearest dollar). Label journal entries a through t.
Accounting Creations Incorporated End of Period Worksheet For the Year Ended December 31, 2018 Unadjusted Adjusted Account Title Trial Balance Adjustments Trial Balance DR CR DR CR DR CR Cash 330,000 - Accounts Receivable 694,980 - Allowance for Doubtful Accounts - 17,000 Interest Receivable - - Merchandise Inventory 425,000 - Prepaid Insurance - - LIFO Reserve - 32,000 Prepaid Advertising - - Prepaid Rent 17,000 - Office Supplies 6,000 - Note Receivable 25,000 Available for Sale Securities 375,000 - Office Building 3,750,000 - Accumulated Depreciation - Office Building - 87,500 Storage Building 1,275,000 - Accumulated Depreciation - Storage Building - - Land 750,000 - Leasehold Improvements 225,000 - Accumulated Depreciation - Leasehold Improvements - - Office Equipment 325,000 - Accumulated Depreciation - Office Equipment - 65,000 Patent 150,000 - Accounts Payable - 345,000 Sales Tax Payable - - Salaries Payable - 142,000 Payroll Taxes Payable - 25,000 Interest Payable - - Income Tax Payable - - Unearned Rent Revenue - - Loan Payable - Onstar Bank - 650,000 Loan Payable - Coldstar Bank - 2,000,000 Common Stock - 650,000 Additional Paid in Capital - 1,998,750 Retained Earnings - 920,000 Accumulated Other Comprehensive Income - 25,000 Dividends 84,750 - Sales - 4,528,200 Sales Returns and Allowances 42,250 - Sales Discounts 19,250 - Cost of Goods Sold 1,979,500 - Sales Salaries Expense 436,400 - Office Salaries Expense 274,000 - Advertising Expense 16,000 - Depreciation Expense - Office Building - Depreciation Expense - Leasehold Improvements - - Depreciation Expense - Office Equipment - - Leasing Expense - Stores 132,000 - Miscellaneous Selling Expense 23,000 - Research & Development Expense 15,000 Rent Expense - Storage Facility - - Insurance Expense 15,000 - Office Supplies Expense 35,000 - Miscellaneous Administrative Expense 9,170 - Rent Revenue - 75,000 Interest Revenue on Note Receivable - - Dividend Revenue on AFS Securities - 25,000 Interest Expense - - Bad Debt Expense 35,000 - Amortization Expense - - Income Tax Expense - - Payroll Taxes Expense 121,150 - 11,585,450 11,585,450Explanation / Answer
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G. Entry to record the rent expense Date Account Title Debit Credit Dec.31.2018 Rent Expense 14167 Prepaid Rent 14167Related Questions
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