Part 1 At November 30 2012 Silver Traders Company had the fo

Part 1 At November 30, 2012, Silver Traders Company had the following trial balance. There is detailed information on the next page about December 2012 transactions that need to be recorded. Slver Traders Company Trial Belance Instructions: You must turn in the work performed on the sheets printed with this page. This WILL NOT BE ACCEPTED ON PLAIN PAPER Write the journal entries (on the folowing General journal page) required for each of the events described below. write the entries in the order described below (#-#8). . Use ONLY the accounts listed on the trial balance for your journal entries. Post the transactions to individual T-accounts and prepare an adJusted trial balance for Sliver Traders Company as of December 31, 2012 The company purchased a building December 1, 2012 with a LT Mortgage Payable of $150,000 at 8% interest. (Record the purchase af the building.) Cash 150,000 2. The company issued 500 shares of Common Stock for $6,000 on December 25, 2012 Cash 6000 Common stock 6000 3. On December 29, 2012 the company declared a cash dividend of $3.00 per share for common stock on the shares issued and declared (including the additional 500 shares declared on December 25) 4. The terms of the LT mortgage payable from #1 above require the company to make monthly installment payments over the term of the loan, Each payment consists of interest on the unpaid balance of the loan and a reduction of loan principal. Record the first monthly payment of $1,900 on the LT Mortgage Payable on December 31, 2012 5. The company last paid interest on the ST note payable on November 1, 2012. Record the accrued interest expense for the last 2 months of 2012. The annual interest rate is 8%. Roundi nearest 6. The Bonds Payable and related Premium amounts on the Nov, trial balance relate to the Jan. 1, 2012 issuance of the following bonds: On Jan. 1, 2012, the company issued 10%, 10-year bonds when the market rate for similar investments was 8%. The company pays interest each year on January 1 on Dec. 31, 2012, use the efective interest method of amortizing the premium on bonds payable to accrue the interest expense for 2012 dollan 7. The Unearned Revenue amount on the Nov. trial balance relates to amounts that the company previously collected in cash for sales that were to be completed in the future. The company completed some of these sales during December and now owes only $16,000 of that unearned revenue. Record the necessary adjustment for December 31, 2012. 8. On December 31, 2012, the company purchased 50 shares of its own Preferred Stock for Treasury Stocik for $11 per share

Solution

Silver Traders Company General journal for the month of December , 2012 Date Account Title Debit Credit Dec.1 Building 150000 L.T.Mortgage Payable 150000 (Building purchased on mortgage) Dec.2 Cash 6000 Common Stock 500 Paid-in-capital in excess of par - CS 5500 (500 shares of common stock issued for $6,000) Dec.29 Dividends 10500 Dividends Payable 10500 (Delcaration of cash dividend at$3.00 per share on common stock) Dec.31 Interest Expense 1000 L.T.Mortgage Payable 900 Cash 1900 (First instalment paid onthe LT mortgage ) Dec.31 Interest Expense 200 Interest Payable 200 (Interest on ST note payable @8% on $15,000 for two months) Dec.31 Interest Expense 18147 Premium on bonds payable 1853 Interest Payable 20000 (Interest on bonds payable and amortization of premium on bonds) Dec.31 Unearned Revenue 30000 Sales Revenue 30000 (Sales completed during December from unearned revenue) Dec..31 Treasury Stock 550 Cash 550 (Cost of 50 sahres of own preferred stock purchased) 10% Bonds payable 200000 Premium on bonds payable 26840 Total value of the bonds 226840 Market rate for similar bonds 8% Interest o the value of the bonds at 8% 18147 Cash payment of interest (10% of 200,000) 20000 Premium amortized 1853 Building L.T.Mortgage Payable Date Debit Date Credit Date Debit Date Credit Dec.1 150000 Dec.31 900 Dec.1 150000 150000 0 900 150000 End Bal. 150000 End Bal. 149100 Cash Common Stock Date Debit Date Credit Date Debit Date Credit Beg.Bal. 287000 Dec.31 1900 Beg.Bal. 3000 Dec.2 6000 Dec.31 550 Dec.2 500 293000 2450 0 3500 End Bal. 290550 End Bal. 3500 Paid-in-capital in excess of par - CS Dividends Date Debit Date Credit Date Debit Date Credit Beg.Bal. 86000 Beg.Bal. 5000 Dec.2 5500 Dec.29 10500 0 91500 15500 0 End Bal. 91500 End Bal. 15500 Dividend Payable Interest Expense Date Debit Date Credit Date Debit Date Credit Dec.29 10500 Beg.Bal. 8000 Dec.31 1000 0 10500 Dec.31 200 End Bal. 10500 Dec.31 18147 27347 0 End Bal. 27347 Interest Payable Premium on Bonds Payable Date Debit Date Credit Date Debit Date Credit Dec.31 200 Dec.31 1853 Beg.Bal. 26840 Dec.31 20000 0 20200 1853 26840 End Bal. 20200 End Bal. 24987 Sales Revenue Uearned Revenue Date Debit Date Credit Date Debit Date Credit Beg.Bal. 819000 Dec.31 30000 Beg.Bal. 46000 Dec.31 30000 0 849000 30000 46000 End Bal. 849000 End Bal. 16000 Treasury Stock Date Debit Date Credit Dec.31 550 550 0 End Bal. 550 Silver Traders Company Trial Balance December 31, 2012 Account Debit Credit Cash 290550 Accounts Receivable 62000 Alowance for doubtful accounts 5000 Short term note receivable 24000 Supplies 6000 Inventory 65000 Equipment 195000 Building 150000 Acumulated Depreciation 75000 Copyright 44000 Accounts Payable 45000 Divdend Payable 10500 Interest Payable 20200 Unearned Revenue 16000 ST Note Payable 15000 LT Mortgage Payable 149100 Bonds Payable 200000 Premium on Bonds Payable 24987 Common Stock - $1 par 3500 Paid in capital in excess of par - CS 91500 Preferred Stock $5 par 1000 Paid in capital in excess of par - PS 50000 Treasury Stock 550 Retained Earnings 105000 Dividends 15500 Sales Revenue 849000 Sales Returns and allowances 3840 Sales Discounts 9000 Cost of goods sold 380000 Bad Debt Expense 5000 Depreciation Expense 50000 Wages Expense 260000 Rent Expense 63000 Insurance Expense 16000 Supplies Expense 6000 Interest Revenue 1000 Interest Expense 27347 Gain on sale of equipment 15000 Income tax expense 4000 Total 1676787 1676787