Question $1$

Please refer to the instructions and the table in this question. Enter the correct journal entry for part $[$A$]$ in the following Balance Sheet and Income Statement for $20$X$1$ and $20$X$2.$ Note that for the purpose of preparing the Balance Sheet at the end of each year:

For investments, you need to classify whether they are current assets $($i$.$e$.,$ short$-$term investment$)$ or non$-$current assets $($i$.$e$.,$ long$-$term investment$)$;

For bonds, you need to determine what portion of the bonds payable is current liability and what portion is non$-$current liability. Current portion of the bonds payable is the principal payment portion of the cash interest payments in the next year. Non$-$current portion is the remaining amount of the bonds payable; and

For leases $($as the lessee$),$ you need to determine what portion of the lease obligation is current liability and what portion is non$-$current liability. Current portion of the lease obligation is the principal payment portion of the cash lease payment in the next year $($i$.$e$.,$ the amortization amount of the lease obligation in the next year$).$ Non$-$current portion is the remaining amount of the lease liability.

Project $3\mathrm{.}3$ Balance Sheet

Illini Company, Inc.

Balance Sheet

$12/31/20$X$1$

$12/31/20$X$2$

Assets

Current Assets

Cash

$$1,336,056$

$$1,922,356$

Short$-$term investment

$[$A$]$

$[$B$]$

Accounts receivable, net of allowance

$34,150$

$67,800$

Interest Receivable

$9,636$

$6,999$

Prepaid insurance

$6,000$

$0$

Inventory

$310,000$

$50,000$

Total current assets

$1,733,841$

$2,047,155$

Long$-$term investment

$[$C$]$

$[$D$]$

PPE, net

$142,300$

$57,500$

ROU assets, net

$137,076$

$101,345$

Investment in lease

$[$E$]$

$[$F$]$

Brand asset

$0$

$16,000$

Goodwill

$[$G$]$

$[$H$]$

Total assets

$[$I$]$

$[$J$]$

Liabilities and shareholders' equity

Current liabilities:

Wage payable

$[$K$]$

$[$L$]$

Unearned revenue

$0$

$50,000$

Estimated warranty liability

$11,000$

$6,000$

Accrued interest

$12,704$

$9,445$

Current portion of long$-$term bonds

$[$M$]$

$[$N$]$

Current portion of lease obligation

$[$O$]$

$[$P$]$

Total current liabilities

$66,786$

$121,609$

Non$-$current portion of long$-$term bonds

$[$Q$]$

$[$R$]$

Non$-$current portion of lease obligation

$[$S$]$

$[$T$]$

Pension liability

$2,000$

$9,800$

Total liabilities

$286,437$

$236,341$

Shareholders' equity:

Common stock

$[$U$]$

$[$V$]$

Additional paid$-$in capital $-$ common stock

$280,000$

$316,600$

Preferred stock

$100,000$

$100,000$

Treasury stock

$[$W$]$

$[$X$]$

Retained earnings

$[$Y$]$

$[$Z$]$

Accumulated other comprehensive income

$[$i$]$

$[$ii$]$

Total shareholders' equity

$1,919,138$

$2,070,652$

Total liabilities and shareholders' equity

$$2,205,575$

$$2,306,992$