Prepare all necessary journal entry transactions along with the closing ones.
1. Issued 200 common stock.
2. Issues a note for 12,000 which pays an annual interest of 6%.
3. Bought a car for 20,000 salvage value 2000 straight line dep. with 10 years of useful life.
4. Purchased inventory for 30,000 on account.
5. Sold inventory costing 20,000 for 40,000 on account.
6. Issued a check for 30,000 for the inventory purchased on account (#4 transaction).
7. Customer paid 38,0000 of the 40,000outstanding balance. No other payments were received from the customer during the year. The company estimates bad debts at 8% of customer balance each year, and this receivable is considered collectible at year end.
8. Trading securities were purchased for 1000. The securities were worth 2000 at the year end.