Question 5 27 Points Please show all work to receive full credit. Vandelay Industries began operations in 2021. The following selected transactions occurred from February 2022 through April 2023. Vandelay's fiscal year ends on December 31, 2022 a. On February 9, Vandelay Industries opened a checking account and negotiated a short-term line of credit of up to $5,000,000 at 9% interest. The company is not required to pay any commitment fees. b. On August 1, Vandelay Industries, supported by the line of credit, issued $2,750,000 of commercial paper on a 6-month note. Interest was discounted at issuance at a 6% discount rate. c. December credit sales totaled $2,525,000 before tax. The state sales tax rate is 7.5%. d. Vandelay Industries received $27,000 of refundable deposits in cash in December for reusable containers. e. Record any necessary December 31st adjusting entry(s). 2023 f. Geronimo Inc. paid the commercial paper at maturity. g. 75% of the storage containers are returned to Vandelay Industries in April. The remaining storage containers are being kept by Vandelay's customers. The total cost for all of the forfeited containers is $ 2,970. Required 1 Prepare the appropriate journal entries for the 2022 transactions. 2 Prepare the appropriate journal entries for the 2023 transactions. Note: All General Journal entries should be in proper format. Do not round.
Question 5 27 Points Please show all work to receive full credit. Vandelay Industries began operations in 2021. The following selected transactions occurred from February 2022 through April 2023. Vandelay's fiscal year ends on December 31, 2022 a. On February 9, Vandelay Industries opened a checking account and negotiated a short-term line of credit of up to $5,000,000 at 9% interest. The company is not required to pay any commitment fees. b. On August 1, Vandelay Industries, supported by the line of credit, issued $2,750,000 of commercial paper on a 6-month note. Interest was discounted at issuance at a 6% discount rate. c. December credit sales totaled $2,525,000 before tax. The state sales tax rate is 7.5%. d. Vandelay Industries received $27,000 of refundable deposits in cash in December for reusable containers. e. Record any necessary December 31st adjusting entry(s). 2023 f. Geronimo Inc. paid the commercial paper at maturity. g. 75% of the storage containers are returned to Vandelay Industries in April. The remaining storage containers are being kept by Vandelay's customers. The total cost for all of the forfeited containers is $ 2,970. Required 1 Prepare the appropriate journal entries for the 2022 transactions. 2 Prepare the appropriate journal entries for the 2023 transactions. Note: All General Journal entries should be in proper format. Do not round.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 92PSA
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Transcribed Image Text:Question 5 27 Points Please show all work to receive full credit. Vandelay Industries began operations in 2021. The
following selected transactions occurred from February 2022 through April 2023. Vandelay's fiscal year ends on
December 31, 2022 a. On February 9, Vandelay Industries opened a checking account and negotiated a short-term
line of credit of up to $5,000,000 at 9% interest. The company is not required to pay any commitment fees. b. On
August 1, Vandelay Industries, supported by the line of credit, issued $2,750,000 of commercial paper on a 6-month
note. Interest was discounted at issuance at a 6% discount rate. c. December credit sales totaled $2,525,000 before tax.
The state sales tax rate is 7.5%. d. Vandelay Industries received $27,000 of refundable deposits in cash in December
for reusable containers. e. Record any necessary December 31st adjusting entry(s). 2023 f. Geronimo Inc. paid the
commercial paper at maturity. g. 75% of the storage containers are returned to Vandelay Industries in April. The
remaining storage containers are being kept by Vandelay's customers. The total cost for all of the forfeited containers is $
2,970. Required 1 Prepare the appropriate journal entries for the 2022 transactions. 2 Prepare the appropriate journal
entries for the 2023 transactions. Note: All General Journal entries should be in proper format. Do not round.
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