Accounts Receivable is composed of the following unpaid invoices. All open invoices have payment terms of 2/10, net 30.

DateCustomerInvoice #Amount Due
11/30Igotta Troubles132,750
12/15Igotta Troubles162,500
12/30Igotta Troubles182,500
12/30Red Fiche192,500
12/30Cooking for You201,500

Accounts Payable detail is as follows:

DateVendorTermsAmount DueAccount Detail
9/6Insure MartNet 301200Prepaid Insurance
10/19Paul’s PlumbingNet 30220Repairs and maintenance
11/10Sign’s R UsUpon delivery (not delivered yet)600Advertising & Promotions
12/30Max PowerNet 30170Utilities Expense
12/30WaterworksNet 3020Utilities Expense
12/30Great Coverage CellularNet 3050

Write journal entries for the following events that occurred in January:

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  • 1/3 You received an email from InsureMart notifying you that you were delinquent on your payments and needed to pay your outstanding bill in full immediately. You issued check #200 and paid the bill in full.
  • 1/4 You received payment in the amount of $2450 from Red Fische in the full payment of invoice 19.
  • 1/5 You issued check #201 to pay the December payroll to Mandi Handi.
  • 1/5 You made the 4th payment on the note payable. You had an interest expense and set up a related interest payable on 12/31 in the amount of $184. For more information on the note, see the explanation at 1/31 below.
  • 1/6 You received a phone call from Paul’s Plumbing indicating that he had not yet received your payment for services performed. You apologize and inform him that the payment will be made today. You immediately issue check # 202 and send the payment.
  • 1/7 You paid the monthly rent for your office by issuing check #203 for $500 to Office Builders for January’s rent.
  • 1/8 You purchased supplies from KEM Supply for your business at a cost of $800. KEM gave you a bill and added the amount to your account. The payment terms on your account will be 2/10, net 30. The time period for determining the payment amount begins on the purchase date. All purchases of supplies are capitalized as an asset.
  • 1/9 You issued check #204 to Max Power and check #205 to WaterWorks #1 and check #206 to Great Cellular Coverage in payment of December utility bills and Telephone bill.
  • 1/10 You purchased $50 of fuel for your new SUV from Get ‘n Go. You charged this to your Get ‘n Go account. Get ‘n Go gave you your bill.
  • 1/12 You remitted payment to the U.S Treasury for the federal income taxes, FICA taxes and FUTA taxes related to the September payroll with check #207. In addition, you remitted payment to the Louisiana Department of Revenue with check #208 for the state income taxes and SUTA taxes related to the 2020 payroll.
  • 1/13 You received a check from Igotta Troubles in full payment of invoices 13, 16 and 18.
  • 1/14 You paid KEM supply for the purchase made on 1/8. You issued check # 209
  • 1/15 Clean Machine Co. came in and cleaned the office and gave you a bill for janitorial services performed in the amount of $200. Payment is due in 30 days.
  • 1/20 First Funds Bank drafted $15 from your bank account for service charges.
  • 1/25 You sent the following invoices, terms 1/10, net 30: #21 to Red Fische for Monthly Accounting Services in the amount of $2,500, and #22 to Cooking For You for Monthly Accounting Services in the amount of $3,000.
  • 1/31 You computed and accrued the interest expense on the Pig E Bank note associated with the purchase of your SUV on 9/5/2020. The note was a $55,000, 5 year, 5% note. You will be accruing the interest from 1/5 through 1/31. Your first payment was made on 10/31. You will need to create a loan amortization schedule to determine the amounts associated with each note payment. You can use a website such as Round all amounts to the nearest dollar.
  • 1/31 Accrue the payroll for January for your administrative assistant, Mandi Handi, she is paid a monthly salary of $2,000. You have decided that all pay periods will end on the last day of the month and that checks will be issued on the 5th of each month. NOTE: Assume the following rates when preparing the payroll: federal income tax 15%, state income tax 5%, and FICA 7.65%. YOUR Accounting Corp. has state and federal unemployment insurance rates of 1% (FUTA) and 2% (SUTA) on the first $7,700 of wages per employee. The employer FICA rate is 7.65%.
  • 1/31 You received monthly bills for the following: Max Power Company – $300, terms n/30 WaterWorks #1 – $20, terms n/30 Great Coverage Cellular – $80, terms n/3

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