HINT: Before booking an entry, remember to evaluate the substance of each transaction/event. Do accounting standards require the event or transaction to be booked into your companys accounting records? NOTE: All interest rates included in the transaction list are stated at an annual rate.

April

13. April 21st, your customers bought 15,000 units of your product for $125 per unit (you decide what your company sells). The cost of this product is determined by the method of inventory valuation used by your company. Customers paid you 55% in cash and the remainder was on account.

14. On April 27nd you purchased 9,250 units at a cost of $67 per unit. You paid 45% in cash and purchased the remainder on account.

15. On April 29th you pay $550,000 cash toward your accounts payable

May

16. On May 1st you pay all dividends owed to your owners.

June

17. Leased additional warehouse space from Leasing Solutions for two years on June 1st due expiration of the previous rental contract. $92,000 cash was paid for the new contract on this date which covers the rental fee for two years. There is no value left in the previous contract. [Adjusting Entry Required]

18. Wage expenses from January 1 June 30 $530,000. Pay this in full including your beginning balance in wages payable.

19. On June 19th, $95,000 of prepaid insurance was used.

20. On June 26th a customer that previously bought your product on account has filed for bankruptcy. He owed you $62,500. You expect to collect $0.

July

21. Your company issued 1,000, 3.8% bonds (face value of each bond is $1,000) at 101.8250 on July 1st, 2019. The bonds are due on July 1, 2024, with interest payable each January 1 and July 1. The market rate at the time of the bond issuance was 3.4%. Use the effective- interest method to calculate both the interest expense and the amortization of the bond discount when each interest payment is made.[Adjusting Entry Required]