Problem
Pool Corporation, Inc., is the world's largest wholesale distributor of swimming pool supplies and equipment. It is a publicly traded corporation that trades on the NASDAQ exchange. The majority of Pool's customers are small, family-owned businesses. Pool Corporation completed the following transactions during the current year. Pool's fiscal year ends on December 31.
Sept. 15 Purchased and paid for merchandise for resale. The invoice amount was $134,500. Assume Pool uses a periodic inventory system.
Oct. 1 Borrowed $909,500 from Southwest Bank for general use; signed an 11-month, 5% annual interest-bearing note for the money.
Oct. 5 Received a $44,750 customer deposit from Joe Lipscomb for services to be performed in the future.
Oct. 15 Performed $21,800 of the services paid for by Mr. Lipscomb.
Dec. 12 Received electric bill for $12,950. Pool plans to pay the bill in early January.
31 Determined wages of $53,900 earned but not yet paid on December 31 (disregard payroll taxes).
Required:
1. Prepare journal entries for each of these transactions.
2. Prepare all adjusting entries required on December 31.