Exercise 14-37 (Algo) General ledger exercise; bonds; installment note, early extinguishment [LO14-2, 14-3, 14-5]

On January 1, 2024, the general ledger of Freedom Fireworks includes the following account balances:

Accounts	Debit	Credit
Cash	$ 102,600
Accounts receivable	36,800
Inventory	153,400
Land	81,300
Buildings	134,000
Allowance for uncollectible accounts		$ 3,200
Accumulated depreciation		11,000
Accounts payable		33,100
Bonds payable		134,000
Discount on bonds payable	31,400
Common stock		214,000
Retained earnings		144,200
Totals	$ 539,500	$ 539,500

During January 2024, the following transactions occurred:

January 1	Borrowed $114,000 from Captive Credit Corporation. The installment note bears interest at 5% annually and matures in 5 years. Payments of $2,151.32 are required at the end of each month for 60 months.
January 1	Called the bonds at the contractual call price of $114,000. The 7% bonds pay interest semiannually each June 30 and December 31.
January 4	Received $32,400 from customers on accounts receivable.
January 10	Paid cash on accounts payable, $25,000.
January 15	Paid cash for salaries, $30,300.
January 30	Firework sales for the month totalled $201,400. Sales included $66,400 for cash and $135,000 on account. The cost of the units sold was $119,500.
January 31	Paid the first monthly installment of $2,151 related to the $114,000 borrowed on January 1.

The following information is available on January 31, 2024.

1. Depreciation on the building for the month of January is calculated using the straight-line method. At the time the building was purchased, the company estimated a service life of 10 years and a residual value of $25,400.
2. At the end of January, $4,400 of accounts receivable are past due, and the company estimates that 50% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 2% will not be collected. No accounts were written off as uncollectible in January.
3. Unpaid salaries at the end of January are $27,500.
4. Accrued income taxes at the end of January are $6,400.