ACC202: Question 1 At the start of 2021, Henry opened an Interior Design Business The following were Transactions: Financial and Managerial Accounting Assignment, SUSS, Singapore

Question 1
At the start of 2021, Henry opened an interior design business. The following were transactions related to the business for January 2021:

Jan 1 Henry invested $250,000 in the business.

Jan 1 Paid $30,000 for three month’s rent in advance.

Jan 1 Borrowed $120,000 and signed a three-year 10% p.a. note payable. The interest is payable at the end of each year.

Jan 1 Bought equipment for $48,000 and a motor vehicle (MV) for $130,000.

The equipment is depreciated using the double-declining balance method while the motor vehicle is depreciated using the straight-line method.

Other details include:
Useful Life    Residual Value ($)
Equipment  4 years              5,000
MV                    10 years           10,000

Jan 5 Bought $5,000 of supplies agreeing to pay by next month.

Jan 15 $1,000 worth of supplies were defective. Henry returned them to the supplier and received full credit for their cost.

Jan 20 Signed a Letter of Intent to buy new equipment costing $88,000. No deposit was made. The new equipment will be delivered in March 2021.

Jan 28 A customer prepaid $28,000 for services to be performed next month.

Jan 31 Paid $1,200 for the miscellaneous expense.

Jan 31 Worker’s salaries of $8,000 have yet to be paid.

Note: No entry was made on the above transactions.

Analyze the above and record the relevant entries for January 2021.