Accounting 200: Comprehensive Homework 3 Part 1 - Cohen Fencing Company

Accounting 200
Comprehensive Homework 3

Part 1:
At December 31, 2014, Cohen Fencing Company had the following trial balance.
Cohen Fencing Company
Unadjusted Trial Balance
December 31, 2014
Dr Cr
Cash 203,203
Accounts Receivable 60,000
Allowance for Doubtful Accounts 600
Short Term Note Receivable 24,000
Interest Receivable
Prepaid Insurance 11,000
Supplies 6,000
Inventory 65,000
Equipment 175,000
Accumulated Depreciation 75,000
Copyright 48,000
Accounts Payable 35,000
Wages Payable
Interest Payable
Bonds Payable 200,000
Premium on Bonds Payable 11,103
Common Stock 90,000
Retained Earnings 5,000
Dividends 5,200
Sales 923,900
Sales Returns & Allowances 4,000
Sales Discounts 9,000
Cost of Goods Sold 375,000
Bad Debts Expense
Depreciation Expense
Wages Expense 260,000
Rent Expense 65,000
Insurance Expense 16,000
Supplies Expense 7,000
Interest Revenue 800
Interest Expense 9,000
Gain on Sale of Equipment 5,000
Income Tax Expense 4,000
Total $1,346,403 $1,346,403

Information for the necessary adjustments or calculations as of December 31, 2014:
1. The company last received interest on the note receivable on October 30, 2014. Interest will next be paid on April 30, 2015, when the note matures. Record the accrued interest revenue for the last 2 months of 2014. The annual interest rate is 6%. Round to nearest whole dollar.
2. The Equipment was purchased prior to 2014. The company uses the straight-line method, assumed a $5,000 salvage value and an estimated useful life of 10 years. Record depreciation expense for the full year of 2014.
3. The company uses the allowance method to record its uncollectible accounts. The new Chief Financial Officer (CFO) estimated that 3% of Accounts Receivables at December 31, 2014, will be uncollectible. Record the adjusting entry for bad debt expense for 2014.
4. The company issued 8%, 10-year bonds when the market rate for similar investments is 5%. The company pays interest each year on January 1st. Using the effective interest method of amortizing the premium on bonds payable, accrue the interest expense as of December 31, 2014. Round to nearest whole dollar for your interest expense calculation.
5. Employees were last paid on December 24, 2014. Several employees worked through December 31st and wages due but not yet paid are $5,500. These wages will be paid in early January. An adjusting entry needs to be recorded to reflect this liability at Dec 31, 2014.

Instructions:
You must turn in the work performed on the sheets printed with this page. Your assignment will NOT BE ACCEPTED ON PLAIN PAPER.
1. Write the journal entries required for each of the 5 events described below on the General page provided. Use ONLY the accounts listed on the trial balance for your journal entries.
2. Post the journal entry transactions to individual T-accounts and prepare an adjusted trial balance for The Cohen Fencing Company as of December 31, 2014.
Use the space below for T-accounts (REQUIRED FOR GRADING). For each account in the journal entries, you will need to adjust the balance from the unadjusted trial balance with the debit or credit from the journal entry. (You only need to provide T-accounts for those that change)
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