ezto.mheducation.com Homework #9 (Chpt 10) Assignments: ACTG 2010 WSU Spr 18 329

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ezto.mheducation.com Homework #9 (Chpt 10) Assignments: ACTG 2010 WSU Spr 18 32963 Apr. 30 Received $705,000 from Commerce Bank after signing a 12-month, 7 percent, promissory note. June 6 Purchased merchandise on account at a cost of $82,000. (Assume a perpetual inventory system.) Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. July 15 Paid for the June 6 purchase. Aug 31 Signed a contract to provide security service to a smal apartment complex and collected six months' fees Dec. 31 Determined salary and wages of $47,000 were eamed but not yet paid as of December 31 (ignore payroll Dec. 31 Adjusted the accounts at year-end, relating to interest Dec. 31 Adjusted the accounts at year-end, relating to security service. in advance amounting to $28,200. (Use an account called Unearned Revenue.) taxes) Required: 182. Complete the required journal entries for each of the above transactions. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list 1 Record the borrowing of $705,000. Record the purchase of inventory worth $82,000 on account. 2 3 Record the payment for inventory in full. Record the collection of six month's security service fees in advance amounting to $28,200. 4 5 Credit Record the wages earned, but not yet paid as of December 31. 6 Record the adjusting entry relating to interest. 7 Record the adjusting entry relating to security service Note: journal entry has been entered Record entry Clear entry View general journal

Explanation / Answer

Solution 1:

Solution 2:

Journal Entries - Jack Hammer Company Date Particulars Debit Credit 30-Apr CashA/c Dr $705,000.00       To Notes Payable $705,000.00 (Being loan taken from bank at 7% for 12 months by signing promissory note) 6-Jun Merchandise Inventory Dr $82,000.00       To Accounts Payable $82,000.00 (Being inventory purchased on account) 15-Jul Accounts Payable Dr $82,000.00       To Cash $82,000.00 (Being payment made to supplier) 31-Aug Cash Dr $28,200.00       To Unearned Revenue $28,200.00 (Being 6 months fees for security service collected in advance) 31-Dec Salary and Wages Expense Dr $47,000.00       To Salary and Wages Payable $47,000.00 (Being salary payment due) 31-Dec Interest Expense Dr ($705,000*7%*8/12) $32,900.00       To Interest Payable $32,900.00 (Being interest on notes accrued but not due for payment) 31-Dec Unearned Revenue Dr $18,800.00       To Service Revenue ($28,200*4/6) $18,800.00 (Being revenue recoganized related to security services)

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