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Assume the year runs from January 1 to December 31 for the Year 2018. On May 1, Company DEF (“The Company") purchased inventories costing $49,000; the
Company paid $29,000 in cash and giving a one-year, 9% note for the balance; accrual of interest expense. On August 1, The Company received $6,000 cash for
legal services to be performed evenly throughout the six months period (starting on August 1); and the Company started rendering the legal services on August 1.
On November 1, The Company paid $5,400 in cash for one year of the rent in advance. (3) Prepare the journal entries to record the above transactions on May 1, August ‘I, and November i.
(b) Prepare the adjusting entries at 31 December 2m 8 related to the above transactions. Assume straighteiine amortization method is applied.
(c) Prepare thejournal entries to record the payment of the note on the maturity date. (d) Indicate the manner in which the above transactions should be reflected in the Current Liabilities section of The Company's Statement of Financial Position at 3i December
2018.

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a)Journa|Entfies Date Account Title Debit Credit
May—01 Inventories 49,000
Cash 29,000
Note Payable 20,000 ( Being Inventories purchased for partly for cash and balance by note payable} Aug—01...

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