Following are selected borrowing transactions by Campus Housing Corporation.
1-Jun Campus purchased new furniture in exchange for a $500,000 promissory note. The note was due in 6 months and bears interest at 8% per annum.
1-Jul Borrowed cash of $90,000, giving a $100,000 one-year note. The interest is implicit in the difference between the cash borrowed and the note's $100,000 maturity value.
1-Oct Campus was experiencing a temporary cash flow crunch. The company issued a $40,000 one-year note in settlement of an outstanding account payable. The note bears interest at 8% per annum. The agreement with the creditor was that Campus would repay the note as soon as possible, and the total interest would be allocated to each month based on the "rule of 78."
31-Oct Campus paid the note and accrued interest resulting from the October 1 transaction.
1-Nov Borrowed $75,000 cash from a local bank by issuing a 2-year, 6% promissory note. The interest is to be calculated based on actual days, using a 365-day year assumption.
1-Dec Campus paid the note and accrued interest resulting from the June 1 transaction.
(a) Prepare journal entries necessary to record the above transactions.
(b) Prepare year-end adjusting journal entries pertinent to the above borrowing transactions.

(a)
GENERAL JOURNAL
Date Accounts Debit Credit

(b)
GENERAL JOURNAL
Date Accounts Debit Credit

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Bunny GreenfelderLv2

29 Sep 2019

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Ty Koon, Harry Pitts and Eileen Dover are the founders of Sharpe Incorporated. The charter of the corporation authorized 500,000 shares of $5 par common stock, and 50,000 shares of $40 par, 5%, preferred stock. The company began business on January 1 of the current year.

Selected transactions completed by Sharpe Incorporated during the fiscal year-ending December 31, 2013, are as follows:

Jan 1 Issued 16,000 shares of $5 par common stock at $18, receiving cash.

Jan 1 Issued 7,200 shares of $40 par preferred 5% stock at $42 for cash. The dividends are payable semi-annually.

Jan 31 Purchased a two-year insurance policy for $34,080.

Feb 1 Purchased equipment for $290,000 in exchange for paying $50,000, issuing a $50,000, 180-day, 5% note payable, and issuing 9,500 shares of common stock.

May 1 Purchased 1,200 shares of the companyâs own common stock at $22 per share.

June 1 Declared a cash dividend at the stated amount on the preferred stock.

June 30 Paid the cash dividend on the preferred stock.

July 1 Issued $1,000,000 of 9-year, 8% bonds with interest payable semiannually. The amount of cash received was $1,092,880.

July 30 Paid the amount due on the note payable signed on February 1.

Aug 1 Sold 450 shares of treasury common stock purchased on May 1 for $26 per share.

Oct 1 Purchased 30,000 of the 100,000 outstanding shares of Precision Corporation for $5.10 per share, plus a $125 commission to the stockbroker.

Oct 16 Sold 250 shares of treasury common stock purchased on May 1 for $20 per share.

Nov. 1 Borrowed $36,000 from Second Bank by issuing a 90-day, 7% note.

Dec 15 Declared a cash dividend at the stated amount to preferred stockholders and $.50 per share on the outstanding common shares. The date of record is December 30, and the dividend is payable January 15, 2014.

Dec 31 Record revenue for the year of $1,975,000, receiving $500,000 in cash with the remainder on account.

Dec 31 Record expenses for the year (one compound entry). All were paid in cash, except for $30,000 on account.

Rent $170,000

Utilities 13,200

Salaries 760,000

Payroll tax expense 45,600

Advertising 120,000

Medical insurance 32,000

Commissions 63,000

Legal and accounting 18,000

Miscellaneous 8,400

Dec. 31 Paid the semiannual interest and amortized the premium on the bonds issued on July 1.

Dec. 31 Received a cash dividend from Precision Corporation of $0.10 per share.

Dec. 31 Precision Corporation reported earnings of $25,000 for the period from October 1 to December 31.

Adjusting Entries

(1) The employeesâ accrued vacation pay at the end of the year was $26,000.

(2) Record depreciation on the equipment purchased on February 1, using the straight-line method. The equipment has an estimated 9-year useful life and an estimated residual value of $13,520.

(3) Record insurance expired on the policy purchased January 31.

(4) Record interest accrued on the note payable (November 1).

1). Write a Income Statement

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