Sunny Company had the following transactions during the month of January 2023:

1. On January 1, 2023, the company started its operations by issuing 50,000 shares of common stock at a par value of $1 per share and raising $200,000 in cash.

2. On January 2, 2023, the company purchased a delivery truck for $60,000. The truck is expected to have a useful life of 5 years and a residual value of $10,000.

3. On January 10, 2023, the company purchased $15,000 of merchandise on credit from a supplier.

4. On January 15, 2023, the company paid $5,000 in rent for the next 3 months.

5. On January 20, 2023, the company sold merchandise worth $20,000 for cash.

6. On January 25, 2023, the company collected $10,000 from customers who had purchased merchandise on credit.

7. On January 31, 2023, the company declared and paid dividends of $0.10 per share to its shareholders.

Assume that all transactions were denominated in U.S. dollars. Prepare journal entries for each of the transactions, adjusting entries as of January 31, 2023, and the company's income statement and balance sheet as at January 31, 2023.

Answer rating: 100% (QA)

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