Brilliant Architects
- Deferrals The transactions for the year 2017 for Brilliant Architects have already been recorded. This problem shows how to prepare adjusting entries for Brilliant Architects for December 2017
- Dec. 31 A computer was purchased on January 1, 2015 for $1,600. The useful life of the computer is 4 years.
-Dec. 31 On October 1, 2017, Brilliant Architects had paid $4,800 as rent for a six month period. This had been recorded as prepaid rent.
-Dec. 31 The amount of supplies available at the end of December was $200. The amount of supplies at the beginning of the period was $450. $250 of supplies were purchased during the year.
-Dec. 31 Furniture costing $3,000 was purchased on Jan 1, 2014. The useful life of the furniture is estimated to be 5 years.
-Dec. 31 Services were provided to a customer for $450. The cash was collected in advance on November 28, 2017.
Date 2017 Account Debit Credit Dec. 31 Dec.31 Dec.31 Dec.31
Brilliant Architects
- Deferrals The transactions for the year 2017 for Brilliant Architects have already been recorded. This problem shows how to prepare adjusting entries for Brilliant Architects for December 2017
- Dec. 31 A computer was purchased on January 1, 2015 for $1,600. The useful life of the computer is 4 years.
-Dec. 31 On October 1, 2017, Brilliant Architects had paid $4,800 as rent for a six month period. This had been recorded as prepaid rent.
-Dec. 31 The amount of supplies available at the end of December was $200. The amount of supplies at the beginning of the period was $450. $250 of supplies were purchased during the year.
-Dec. 31 Furniture costing $3,000 was purchased on Jan 1, 2014. The useful life of the furniture is estimated to be 5 years.
-Dec. 31 Services were provided to a customer for $450. The cash was collected in advance on November 28, 2017.
| Date 2017 | Account | Debit | Credit |
| Dec. 31 | |||
| Dec.31 | |||
| Dec.31 | |||
| Dec.31 |
Related questions
The following transactions were completed by Hobson Inc., whosefiscal year is the calendar year:
| 2016 | |
| July 1. | Issued $4,370,000 of five-year, 8% callable bonds dated July 1,2016, at a market (effective) rate of 9%, receiving cash of$4,197,109. Interest is payable semiannually on December 31 andJune 30. |
| Oct. 1. | Borrowed $170,000 as a 10-year, 8% installment note from MarbleBank. The note requires annual payments of $25,335, with the firstpayment occurring on September 30, 2017. |
| Dec. 31. | Accrued $3,400 of interest on the installment note. Theinterest is payable on the date of the next installment notepayment. |
| Dec. 31. | Paid the semiannual interest on the bonds. The bond discountamortization of $17,289 is combined with the semiannual interestpayment. |
| Dec. 31. | Closed the interest expense account. |
| 2017 | |
| June 30. | Paid the semiannual interest on the bonds. The bond discountamortization of $17,289 is combined with the semiannual interestpayment. |
| Sept. 30. | Paid the annual payment on the note, which consisted ofinterest of $13,600 and principal of $11,735. |
| Dec. 31. | Accrued $3,165 of interest on the installment note. Theinterest is payable on the date of the next installment notepayment. |
| Dec. 31. | Paid the semiannual interest on the bonds. The bond discountamortization of $17,289 is combined with the semiannual interestpayment. |
| Dec. 31. | Closed the interest expense account. |
| 2018 | |
| June 30. | Recorded the redemption of the bonds, which were called at 98.The balance in the bond discount account is $103,735 after paymentof interest and amortization of discount have been recorded.(Record the redemption only.) |
| Sept. 30. | Paid the second annual payment on the note, which consisted ofinterest of $12,661 and principal of $12,674. |
Required:
1. Journalize the entries to record theforegoing transactions. For compound transactions, if an amount boxdoes not require an entry, leave it blank or enter "0". Whenrequired, round your answers to the nearest dollar.
| Date | Account | Debit | Credit |
|---|---|---|---|
| 2016 | |||
| July 1 | Cash | ||
| Discount on bonds payable | |||
| Bonds payable | |||
| Oct. 1 | Cash | ||
| Notespayable | |||
| Dec. 31-Note | Interest expense | ||
| Notespayable | |||
| Dec. 31-Bond | Interest expense | ||
| Dec. 31-Closing | |||
| 2017 | |||
| June 30 | |||
| Sept. 30 | |||
| Dec. 31-Note | |||
| Dec. 31-Bond | |||
| Dec. 31-Closing | |||
| 2018 | |||
| June 30 | |||
| Sept. 30 | |||
2. Indicate the amount of the interest expensein (a) 2016 and (b) 2017.
a. 2016 $
b. 2017 $
3. Determine the carrying amount of the bondsas of December 31, 2017.
$
Accounting for Plant Assets
Stellar Delivery Service had the following transactions relatedto its delivery truck:
| Year 1 | |
| Mar. 1 | Purchased for $32,500 cash a new delivery truck with anestimated useful life of five years and a $6,850 salvage value. |
| Mar. 2 | Paid $600 for painting the company name and logo on thetruck. |
| Dec. 31 | Recorded depreciation on the truck for the year. |
| Year 2 | |
| July 1 | Installed air conditioning in the truck at a cost of $1,808cash. Although the truckâs estimated useful life was unaffected,its estimated salvage value was increased by $400. |
| Sept 7 | Paid $450 for truck tuneâup and safety inspection. |
| Dec. 31 | Recorded depreciation on the truck for the year. |
| Year 3 | |
| Sept 3 | Installed a set of front and rear bumper guards at a cost of$145 cash. |
| Dec. 31 | Recorded depreciation on the truck for the year. |
| Year 4 | |
| Dec. 31 | Recorded depreciation on the truck for the year. |
Stellarâs depreciation policies include (1) using straightâlinedepreciation, (2) recording depreciation to the nearest wholemonth, and (3) expensing all truck expenditures of $150 orless.
Required
Prepare journal entries to record these transactions andadjustments.
Round answers to the nearest whole number, when appropriate.
