Le Petit Croissant Ltd. (LPC) is a wholesale bakery that supplies flash frozen croissants to restaurants, hotels, and other commercial customers. LPC began operating in August 2020 and had the following transactions in its first month:

Aug. 1 LPC issued 30,000 common shares to its two founding shareholders in exchange for $250,000 in cash and equipment valued at $50,000. 

1 The company borrowed $100,000 from the Commercial Bank at an interest rate of 6%.

The borrowing agreement terms state that the loan is to be repaid at the end of each month in the amount of $2,500 per month plus interest.

3 In order to access a commercial kitchen, LPC leased the site of a former restaurant, paying $6,000, of which $3,000 represented the rent for August and the balance was a damage deposit.

8 LPC purchased flour and other ingredients costing $32,800 on account.

12 LPC paid $6,800 to a local marketing company for its logo design and media planning services.

14 LPC recorded its sales of the first two weeks of the month. Total sales (half in cash and half on account) amounted to $50,200, and the inventory related to these sales was determined to have a cost of $17,100.

19 Paid the suppliers $25,000 for goods previously purchased on account.

25 Collections from customers on account totalled $22,600.

26 LPC purchased additional inventory (flour and so on) on account for $23,000.

29 LPC received an invoice from its natural gas supplier for $2,700, which is payable on September 14.

31 LPC recorded the sales for the balance of the month. Sales for this period totalled $60,800, of which $20,000 was on account. The cost of the ingredients from inventory related to these sales amounted to $20,700.

31 LPC’s six full-time employees were paid $3,900 each in wages for the month.

31 LPC made the loan payment required under the terms of the borrowing agreement.

31 LPC’s board of directors declared a dividend of $1.00 per share to the holders of the company’s common shares.

Required

Prepare all necessary journal entries related to the above transactions.