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Solutions to Exam 1

# Solutions to Exam 1 - PROBLEM 1(22 points A Prepare the...

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PROBLEM 1 (22 points) A. Prepare the journal entries that would be required on the date of each of the activities listed below. If a journal entry is not required, please state the reason. Use good form. B. Prepare any necessary adjusting journal entries that may be required on November 30, 2008 for the activities listed below. If an adjusting journal entry is not required, please state the reason. Use good form. Note : The company prepares financial statements at the end of each month . 1. Revenue earned for services rendered to customers, but not yet billed, totaled \$5,000 on November 30. 1 point each - 2 points total Journal entry on November 30, 2008 Dr. A/R 5,000 Cr. Revenue 5,000 2. On September 1, 2008, the company loaned \$24,000 to an employee for one year at an interest rate of 12%. Both principal and interest are due on August 31, 2009. 1 st j/e = 1 point each & 2 nd j/e = 3 points for total of 4 points Journal entry on September 1, 2008 Dr. Note Receivable 24,000 Cr. Cash 24,000 Journal entry on November 30, 2008 Dr. Interest Receivable 240 Cr. Interest Revenue 240 24,000 X 12% X 1/12 = 240 3. The company purchased equipment on January 1, 2008, for \$48,000 cash.

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Solutions to Exam 1 - PROBLEM 1(22 points A Prepare the...

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