Daniels Company engaged in the following transactions during 2020: a. Purchased $35,000 of merchandise from XYZ Supplies on January 26. Amount due in full on February 28. b. Paid for 40% of the purchased merchandise (Transaction a) on February 26. c. On February 28, negotiate a payment extension with XYZ for the remainder of the balance from the January 26 purchase by signing a 1-year, 8% note. d. Borrowed $200,000 on an 8-month, 9% interest-bearing note on July 31. e. Purchased $140,000 of merchandise on August 2. Amount due in full on September 30. f. Paid for the purchased merchandise (Transaction e) on September 28. g. Received from Martel Inc. on October 4, a $40,000 deposit against a total selling price of $400,000 for services to be performed for Martel. h. Paid quarterly installments of Social Security, Medicare, and individual income tax withholdings, as shown below, on October 10. The Social Security and Medicare were previously recorded as expenses during the quarter and the amounts paid represent both the employee and employer shares (50% each). Social Security taxes withheld $280,000 Medicare taxes withheld 65,500 Federal income taxes withheld 720,000 i. On December 15, Daniels completed the services ordered by Martel on October 4. Martel’s remaining balance of $360,000 is due on January 31. Required: 1. Prepare journal entries for these transactions. 2. Prepare any adjusting entries necessary at December 31, 2020.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 15EA: Resin Milling issued a $390,500 note on January 1, 2018 to a customer in exchange for merchandise....

See similar textbooks

Related questions

Question

Daniels Company engaged in the following transactions during 2020:

a.	Purchased $35,000 of merchandise from XYZ Supplies on January 26. Amount due in full on February 28.
b.	Paid for 40% of the purchased merchandise (Transaction a) on February 26.
c.	On February 28, negotiate a payment extension with XYZ for the remainder of the balance from the January 26 purchase by signing a 1-year, 8% note.
d.	Borrowed $200,000 on an 8-month, 9% interest-bearing note on July 31.
e.	Purchased $140,000 of merchandise on August 2. Amount due in full on September 30.
f.	Paid for the purchased merchandise (Transaction e) on September 28.
g.	Received from Martel Inc. on October 4, a $40,000 deposit against a total selling price of $400,000 for services to be performed for Martel.
h.	Paid quarterly installments of Social Security, Medicare, and individual income tax withholdings, as shown below, on October 10. The Social Security and Medicare were previously recorded as expenses during the quarter and the amounts paid represent both the employee and employer shares (50% each).

Social Security taxes withheld	$280,000
Medicare taxes withheld	65,500
Federal income taxes withheld	720,000

i.	On December 15, Daniels completed the services ordered by Martel on October 4. Martel’s remaining balance of $360,000 is due on January 31.

	Required:
1.	Prepare journal entries for these transactions.
2.	Prepare any adjusting entries necessary at December 31, 2020.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions