The following transactions are for a new start-up company called Les Crazy: Assume cash transactions unless otherwise

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The following transactions are for a new start-up company called Les Crazy: Assume cash transactions unless otherwise noted.

1/1 An Investor acquired 100% of Crazy’s stock with an investment of $2,400,000 cash. The Par value of the stock was 2.00/share and 8,000 thousand shares were issued

2/1 Prepaid rent for $144,000 for the next 18 months.

2/5 Purchased with cash office equipment for $600,000 and purchased supplies on credit for $80,000. At year-end depreciation on office equipment was $60,000.

2/7 Received $850,000 cash for consulting services to be performed in the future. By year-end, there is $300,000 of services yet to be delivered.

4/1 Created second division (will be disposed of). Sold and delivered consulting services worth $400,000; Paid $250,000 worth of salary expense. The business bought assets for $20,000. Depreciation taken on assets was $5,000. At the end of the year, the division (which included the asset) was sold for $10,000. There were no other transactions related to the discontinued operation.

8/1 Crazy borrowed $350,000 cash by issuing a 3-year note with a stated interest rate of 9% per year. To be compounded annually. The interest will be paid on January 1 of each subsequent year, and the principal will be paid on the maturity date

Throughout the year - providing consulting services of $1,400,000 on credit throughout the year.

10/1 Purchased $200,000 worth of another company’s stock and $100,000 of bonds.

12/14 Collected $520,000 from customers.

12/15 Paid our (2/5) creditors $70,000. Sold and delivered $200,000 of services. They paid in cash immediately.

12/31 Counted supplies and determined that $6,000 of supplies were still on hand

12/31 Salaries expense is $500,000. We paid $475,000 to date. We still owe the rest.

12/31 Determined that the stock purchased on 10/1 was now worth $280,000. We sold the bond for $102,000 cash. The stock was not sold. We received cash of $1,000 for interest from bonds and cash of $4,000 in dividends.

12/31 We declared and paid a dividend of $64,000 to our investor

The tax rate is 20% (none of the tax is paid, but it is accrued as a liability)

Required

Journal Entries (including closing), T-accounts, Multi-step Income Statement, Retained Earnings Roll-forward, Balance Sheet.