Exercise 18-26 (Algo) General ledger exercise; Bonds; Installment note, early extinguishment [LO18-4, 18-5, 18-7]

On January 1, 2021, the general ledger of Freedom Fireworks includes the following account balances:

Accounts	Debit			Credit
Cash	$	42,800
Accounts Receivable		44,700
Supplies		7,600
Equipment		65,000
Accumulated Depreciation				$	9,100
Accounts Payable					14,700
Common Stock, $1 par value					11,000
Paid-in Capital-Excess of Par					81,000
Retained Earnings					44,300
Totals	$	160,100		$	160,100

During January 2021, the following transactions occur:

January		2		Issue an additional 2,000 shares of $1 par value common stock for $40,000.
January		9		Provide services to customers on account, $14,000.
January		10		Purchase additional supplies on account, $5,000.
January		12		Repurchase 1,100 shares of treasury stock for $19 per share.
January		15		Pay cash on accounts payable, $16,600.
January		21		Provide services to customers for cash, $49,200.
January		22		Receive cash on accounts receivable, $16,700.
January		29		Declare a cash dividend of $0.40 per share to all shares outstanding on January 29. The dividend is payable on February 15.
				(Hint: Freedom Fireworks had 11,000 shares outstanding on January 1, 2021, and dividends are not paid on treasury stock.)
January		30		Resale 800 shares of treasury stock for $21 per share.
January		31		Pay cash for salaries during January, $42,100.

The following information is available on January 31, 2021.

1. Unpaid utilities for the month of January are $6,300.
2. Supplies at the end of January total $5,200.
3. Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a service life of three years and a residual value of $10,100.
4. Accrued income taxes at the end of January are $2,100.

A. Reduce the adjusting entry for supplies

B. Record the adjusting entry for depreciation (remember it should just be calculated for the month of jan)

C. Record the adjusting entry for income tax

D. Record the closing entry for revenue

C. Record the closing entry for expenses