Jack Hammer Company completed the following transactions during 2013. The annual

Question

Jack Hammer Company completed the following transactions during 2013. The annual accounting period ends December 31, 2013. Apr. 30 Received $465,000 from Commerce Bank after signing a 12-month, 7 percent, promissory note. June 6 Purchased merchandise on account at a cost of $66,000. (Assume a perpetual inventory system.) July 15 Paid for the June 6 purchase. Aug. 31 Signed a contract to provide security service to a small apartment complex and collected six months’ fees in advance amounting to $18,600. (Use an account called Unearned Service Revenue.) Dec. 31 Determined salary and wages of $31,000 were earned but not yet paid as of December 31 (ignore payroll taxes). Dec. 31 Adjusted the accounts at year-end, relating to interest. Dec. 31 Adjusted the accounts at year-end, relating to security service. Required: 1. Prepare journal entries for each of the transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Explanation / Answer

Date Debit Credit Apr. 30 Cash 465,000 To Notes Payable 465,000 June 6 Merchandise inventory 66,000 To Accounts Payable 66,000 July 15 Accounts Payable 66,000 To cash 66,000 Aug. 31 cash 18,600 To Unearned service revenue 18,600 Dec 31 Salary and Wages 31,000 To Salary and wages payable 31,000 Dec 31 Interest on notes payable 21,700 To Interest Payable on notes payable 21,700 Dec 31 Unearned service revenue 12,400 To Security Service 12,400

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