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Record the Journal Entries

On February 3, 2017, FCM signed an agreement with Deion Sandersto provide media consulting for his football camp. On December 1,FCM completed some of the work for Sanders, and issued an invoicefor $15,000. Full payment was received on January 15, 2018. Note:the project did not involve video production.

On December 1, to prepare for expansion, FCM issued 1,000 sharesof stock for $90 per share and signed a $20,000 note that is dueNovember 20, 2022. The note carries a 4.5% annual rate of interestwhich is to be paid semi-annually so the first interest paymentwill be made May 31, 2018. (Do not forget to record accruedinterest at the end of the year). On December 3, FCM purchased landfor $100,000 on which to build a 4,000 sq. ft. facility.

On November 15, 2017, FCM sent an invoice for $170,000 to theLivestrong Foundation for creating a promotional video. On December2, FCM received the $170,000 payment from the LivestrongFoundation

On November 30, 2017, FCM purchased, received, and recorded$4,000 of supplies from VimBoot on account. On December 4, FCM paidVimBoot for the supplies purchased the previous month.

On November 30, 2017, FCM accrued $230 for that month’s AT&TInternet and telephone bill. That ATT&T bill was paid onDecember 5.

FCM recorded the purchase of a $1,600 insurance policy on May31, 2017, for coverage from June 6 through December 6, 2017. Noother entries related to this insurance policy have been made. FCMpurchased a new 12-month policy on December 6 for $2,920 cash.

On December 7, NBC Sports contacted FCM about a potential videoproject. On December 15, FCM paid $1,000 to a consultant to gatherfocus groups to determine if there was sufficient demand for theproject NBC Sports proposed. On December 30, the consultantprovided TCM with the report discussing the results of the focusgroups.

On December 11, FCM purchased two computers from Dell Inc. for$4,900 each. FCM paid $500 down with a check; the remaining balanceis due in 30 days (n/30). The computers have an estimated life ofthree years and a salvage value of $100.

On December 12, an invoice in the amount of $120 was receivedfrom FedEx for transportation-in on the computers purchased onDecember 11. The invoice was paid the same day by check.

On December 15, a $55,000 social marketing project was completedfor JonyJones. The invoice was sent with a due date of January 25,2018. FCM failed to record transaction.

On August 1, 2017, a $12,000 contract was signed for a socialmarketing project with Outright Fitness and FCM received the fullpayment on that date. On December 17, FCM completed the project forOutright Fitness.

On December 18, FCM had an unpleasant communication withO-Dij-Games, a company producing on-line video games and along-time customer of FCM. O-Dij-Games had recently difficultieswith revenue generation and financing. O-Dij-Games’ managementexpresses an unwillingness to pay FMC the remaining $1,500 due toFMC because of dissatisfaction with the outcomes from FCM’s socialmedia campaigns. O-Dij-Games indicated its intention to never useFMC services in the future. FCM wrote off the O-Dij-Games’outstanding balance. FCM uses the allowance method for baddebts.

On December 19, FCM received $28,000 payment for a promotionalproject that was completed for Chuck Nash Chevy in October 2017.The receivable had been recorded upon completion of theproject.

On November 22, FCM borrowed $15,000 on a 5%, 30-day note fromSocialVid Consulting. On December 22, FCM repaid the note andinterest.

On December 22, FCM issued a $340 check to reimburse an employeefor travelling to Houston to make a presentation to potentialcustomers.

On December 29, supplies of $900 were purchased on account(n/30) and delivered.

A cash dividend of $9,700 was declared and paid on December30.

Beginning in April 2017, FCM performed a variety of social mediaservices for Art Unlimited over a period of six months. ArtUnlimited failed to make its last payment of $11,000, which was dueNovember 15, 2017, because it was waiting for money to betransferred to it from a related art foundation. On December 31,FCM allowed Art Unlimited to replace its account receivable with asix-month note receivable due June 30, 2018; the note carries a 5%interest rate.

All six FCM employees are monthly paid. Wages and Salary Expensefor December 2017 was $9,180, which will be paid on January 2,2018.

FCM used the followinginformation to make adjusting entries:

A physical count of supplies indicated that, as of December 31,2017, $800 worth of supplies were on hand.

On December 15, a $55,000 social marketing project had beencompleted for JonyJones, but FCM forgot to record the transaction(see #10). You identify this oversight on December31^st.

On November 1, YMCA-Austin began negotiations with FCM for$42,000 of video production services. FCM would perform the videoproduction services for YMCA-Austin over a 12-month period. FCMsigned the contract on December 1, 2017 and began shootingimmediately. Payments for the work are to be spread evenlythroughout the 12-month period, with FCM billing YMCA-Austin on thelast day of every month. The check for December’s work for YMCA wasnot received until January 1^st, 2018.

December 2017’s electricity bill of $100 was accrued on December31 but was received and paid on January 2^nd, 2018.

December’s Internet and telephone bill of $230 was accrued atmonth end and paid on January 3, 2018.

Make the adjusting entry necessary to record depreciationexpense for all of 2017. Your assistant has calculated depreciationfor the year, as shown in in the “Extra Info” tab. FCM’s managementhas decided that a full month of depreciation is recorded if anasset is held for 15 days or more; if the asset is used less than15 days in a month, no depreciation is recognized. For example, theequipment acquired on March 19 is depreciated as if it had beenpurchased bought on April 1. A computer sold on November 11 isdepreciated as if it had only been used until October 31.

A lease payment of $6,000 for renting the office was made onOctober 1, 2017, for rental through September 30, 2018. The assetaccount was properly adjusted for October and November. The cost ofleasing the office needs to be made for December 2017.

The Allowance for Doubtful Accounts should be established at 1%of Accounts Receivable as of December 31, 2017. Compute the balanceafter making the December adjusting entries.

During 2017 there were four notes payable outstanding (the threeindicated below and the one repaid on December 22). Interest fortwo of these notes (SnapCut and WestBestVideo) is paid at maturity;interest on the Wells Fargo note is paid semiannually. Properaccruals of the interest were made as of November 30, 2017.Interest for December 2017 needs to be recorded.

         Your assistantcalculated interest for December 2017 below:

SnapCut Inc., 6%, 6 months, due Feb. 28, 2018	10,000 x 0.06 x (1/12)=	50
WestBestVideo, 8%, 6 months, due Apr. 30, 2018	2000 x 0.08 x (1/12)=	13
Wells Fargo, 4.5%, 5 years, due Nov. 20, 2022	20,000 x 0.045 x (1/12) =	75

Insurance expense for December 2017 needs to be recorded usingthe number of days in the insurance policy.