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073Q2 - Name Section 4-Digit Accounting Cycle 073Q2 Prepare...

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Name_____________________________ Section __________ 4-Digit #__________ Accounting Cycle: 073Q2] Prepare the appropriate journal entries based on this information for Year 1 and collect information that will enable you to determine the correct balances in selected accounts at the ends of Year 1 and then Year 2. For the accounts indicated below, place your final account balances in the spaces as provided. ●The Hollywood Company [the firm] was formed on June 1, Year 1, when six investors each invested $8,000 in the firm. One investor lent $15,000 to the firm that is to be repaid on June 1, Year 2, along with $1,500 interest. ●The firm leased an office space for one year on June 1, Year 1, and moved in that same day. The monthly rate was $3,000 and the rent for the twelve months had to be paid on February 1, Year 2. ●On June 1, Year 1, the firm rented some equipment for two years. The firm paid $720 at the time of signing the rental agreement and this amount covered the first twelve months. The contract calls for a second rental payment of $960 on June 1, Year 2, covering the second twelve months of this 2-year contract. ●On June 13, Year 1, the firm purchased some supplies for use in the business at a cost of $2,700. This amount was charged to the firm’s account. ●On June 14, Year 1, the firm returned 20% of the purchased supplies because of defects.
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