Pharoah Ltd$.($PL$)$ is a medical equipment supply company that sells, installs, and services a variety of mobility aid equipment. PL was founded in $2021$ and has seen significant growth since then. PL$$s bookkeeper retired in July, and her replacement has asked for your assistance in recording the following transactions from the month of August $2024.$

Regular entries:

Aug. $1$ PL purchased a new delivery truck for $$82,350,$ paying $$45,750$ cash and financing the balance using a note payable at $2\%$ per annum. The note payable is due in $12$ months, and interest on the note must be paid on the first day of every month, beginning on September $1,2024.$ PL$$s management has determined that the truck will have a useful life of six years and a residual value of $$16,470.$

$1$ PL paid $$4,080$ for an insurance policy on the new truck for the period August $1,2024,$ to December $31,2025.$

$6$ PL sold $$32,940$ of medical equipment, of which $50\%$ was on account and the balance was cash. The cost to PL of the products sold was $$11,400.$

$13$ The company purchased inventory on credit at a cost of $$14,640.$

$20$ Golden Years Retirement Group $($Golden$),$ one of PL$$s largest customers, signed an equipment installation and service contract with PL$.$ The contract runs from September $1,2024,$ to August $30,2025,$ and will mean that PL services all of Golden$$s medical equipment. In accor dance with the contract terms, Golden paid PL $$9,150,$ representing four months$$ service revenue under the contract.

$30$ PL paid dividends in the amount of $$22,875,$ which had been declared by the board $($and recorded$)$ in July $2024.$

Adjusting entries:

Aug. $31$ PL made the necessary month$-$end adjusting entry related to the insurance policy.

$31$ PL made the necessary month$-$end adjusting entry related to the depreciation of the new delivery truck.

$31$ PL made the necessary month$-$end adjusting entry related to the interest on the note payable.

Prepare the journal entries and adjusting entries for the above transactions. $($Record journal entries in the order presented in the problem. List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. Round final answers to $0$ decimal places, e$.$g$.5,255.)$

Answer rating: 100% (QA)

Here are the journal entries and adjusting entries for the transactions provided ... View the full answer