ACC 2010: Intermediate Accounting - Assets Ch03 Class Exercise AGE 2010 Intermediate Accounting - Assets Chapter 3: Accrual Accounting 8: The Accounting Cycle Class Exercise Exercise #1: Journal Entries & Posting Jan. 1: Issued common shares for $100,000 cash. Jan. 2: Purchased inventory on account, $35,000 (perpetual inventory system used) Jan. 4: Purchased one-year insurance policy, $2,400. Jan. 10: Sold merchandise [cost : $7,000) on account for $12,000. Jan. 15: Borrowed $30,000 from local bank and signed note; interest rate : 10%; to be repaid in six months. Jan. 20: Paid wages of $6,000 for first half of month. Jan. 22: Sold merchandise [cost = $6,000) for $10,000 cash. Jan. 24: Paid $15,000 to suppliers for Jan. 2 purchase. Jan. 26: Collected $6,000 on account from customers Jan. 28: Paid $1,000 for January utilities bill. Jan. 30: Paid $4,000 rent, $2,000 for January and $2,000 for February Required: (1) Prepare journal entries for the above transactions. [2) Post inventory related transactions to the related ledger accounts