B&L Landscapes, Inc. Mini Practice Part 2 Bill Graham and Larry Miller incorpora

Question

B&L Landscapes, Inc. Mini Practice Part 2 Bill Graham and Larry Miller incorporated B&L Landscapes, Inc. on July 1, 2017. The business consists of lawn care and sprinker system instalations. In oddition, they also sell two types of fertilizer Bill and Larry are concerned about ensuring a steady supply of high-quality PVC pipe for the sprinkler installations jobs they do and have come up with a plan to issue bonds to several of their family members. These funds will enable them to acquire a significant portion of the stock of a local PVC manufacturer. At the end of July 2017, the company has the following adjusted trial balance: B&L Landscapes, Inc Adjusted Trial Balance July 31. 2017 Cash $ 65.000 Accounts Recelvable Allowance for Doubtful Accounts 500 59,000 25.000 42.500 nd Building Accumulated Depreciation- Building Equipment cumulated Accounts Payable Notes Payable Preferred Stock Common Stock Retained Earnings 22.950 8,000 92.700 Not included in the adjusted trial balance are the following transactions that occur on July 31 2017 B&L Landscapes, Inc. issued $55,000 worth of 5%, 10 year bonds at face value. B&L Landscapes, Inc. purchased 30% of the outstanding common stock of Crestline Pipe, Inc. for $75,000 1, 2.

Explanation / Answer

1) GENERAL JOURNAL Date DESCRIPTION Post Ref. Debit Credit Jul 31, 2017 Cash 101 $55,000           Bonds Payable 250 $55,000 (5% Bond are issued for 10 years) Jul 31, 2017 Stock Investment 145 $75,000.00                   Cash 101 $75,000.00 (Investment in Crestline Common Stock for 30% holding) 4) Dec 15,2017 Cash 101 $1,500.00 Stock Investment ($5000 x 30%) 145 $1,500.00 5) Dec 15,2017 Stock Investment ($21500 x 30%) 145 $6,450.00 Revenue from Stock Investments 450 $6,450.00 2) GENERAL LEDGER ACCOUNT Cash Balance Date DESCRIPTION Post Ref. Debit Credit Debit Credit Jul 31, 2017 Beginning Bal. J3 $65,000.00 Jul 31, 2017 Bonds Payable J3 $55,000.00 $120,000.00 Jul 31, 2017 Stock Investment J3 $75,000.00 Closing Blance $45,000.00 ACCOUNT Bonds Payable Balance Date DESCRIPTION Post Ref. Debit Credit Debit Credit Jul 31, 2017 Cash J3 $55,000 $55,000 ACCOUNT Stock Investments Balance Date DESCRIPTION Post Ref. Debit Credit Debit Credit Jul 31, 2017 Cash J3 $75,000.00 $75,000.00

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