You are the accountant of LTY, Inc., a company dedicated to the sale and manufacture of parts for industrial machinery. LTY closes its books on December 31 of each year and uses a perpetual inventory system and the net method of accounting for accounts receivable and payable.

You are charged with ensuring that the company's financial statements are published correctly in accordance with US GAAP and on a timely basis, no later than March 30, 2022. Although the closing of the books occurred on December 31, 2021, preparation work and compliance with standards continue to the date of publication.

Some events that could affect the 2021 financial statements of LTY, Inc. are summarized below:

1. On November 1, 2021, LTY purchased 2,000 units of inventory on credit at $500 each. The terms of the invoice were 2/10, n/90. On November 9, 2021, he paid 20% of the debt. On January 20, 2022, LTY agreed with the supplier to pay half of the balance due in cash and the other half with common shares of the company. The shares have a par value of $1.

2. On November 30, 2021, you received $32,000 from Banco del Pueblo in exchange for signing a 3-month promissory note for $35,000 with no stipulated interest.

TASK: Prepare a general journal (general journal) using Excel with 4 columns with the following titles: # transaction, Accounts, DR (debit) and CR (credit).

Prepare the journal entry for the transactions or adjustments listed below. If a journal entry is not required, write NOT APPLICABLE. Upon completion of this project, any additional assumptions that have been made should be included in the explanation of the journal entry.

TRANSACTIONS (Clearly present before each journal entry or entry any assumptions you have made applicable to the journal entry)

1. Necessary adjustment on 12/31/2021 related to the credit purchase of November 1, 2020.

2. Adjustment entry on 12/31/2021 related to loan on November 30, 2021.

Answer rating: 100% (QA)

JOURNAL ENTRIES Accounts Transaction 1st November2021 Inventory2000 500 Accoun... View the full answer