Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. ...
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Accounting
Jack Hammer Company completed the following transactions. The annual accounting period ends December 31.
April 30
Received $705,000 from Commerce Bank after signing a 12-month, 7 percent, promissory note.
June 6
Purchased merchandise on account at a cost of $82,000. (Assume a perpetual inventory system.)
July 15
Paid for the June 6 purchase.
August 31
Signed a contract to provide security service to a small apartment complex starting in September, and collected six months fees in advance, amounting to $28,200.
December 31
Determined salary and wages of $47,000 were earned but not yet paid as of December 31 (ignore payroll taxes).
December 31
Adjusted the accounts at year-end, relating to interest.
December 31
Adjusted the accounts at year-end, relating to security service.
Required:
1. & 2. Prepare journal entries for each of the transactions through August 31 and adjusting entries required on December 31.
3. Show how all of the liabilities arising from these items are reported on the balance sheet at December 31.
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