Prepare journal entries for the following transactions (and necessary end-of-months adjustments) for the company XYZ Ltd. October 1 1 2 3 4 5 6 7 8 00 9 10 15 16 18 Shareholders invested kr 5,000,000 cash in the company in exchange for 100,000 ordinary shares. The shares have a par value of kr 10 per share. XYZ issued a seven-year, 6% bond with a face value of kr 1,000,000 for a price of kr 950,000. Interest is payable annually on October 1. Purchased equipment by paying kr 40,000 cash. Collected kr 20,000 cash on account from a client. (The client was billed in the previous month when XYZ performed the service) Investment into research and development (R&D) for kr 35,000 which is paid in cash. Cash payment for two months of rent (October and November) for kr 40,000 per month Purchased supplies for kr 3,500 on account. Paid kr 6,600 cash for a 12-month insurance policy which became effective on October 1. Performed services for a client. This client paid kr 5,780 in advance last month. All services relating to this payment are now completed. Paid kr 1,500 cash for a utility bill. This related to September utilities that were accrued at the end of September. Met with a new client and received kr 35,000 cash in advance for future services to be performed. Cash payment for semi-monthly salaries for kr 88,000. Performed services worth kr 39,000 on account and billed customers. Received a bill of kr 5,000 for advertising services received during October. The amount will be paid on November 15. Performed the first phase of a project. Recognized kr 12,000 of revenue from the cash advance received October 10. Received kr 15,000 cash from customers, who were billed on October 16. Purchased a piece of land. Cash price of the land is kr 1,000,000. Attorney's fee is kr 50,000 and the commission for the real estate broker equals kr 70,000. The transaction is financed with a cash payment. The board of directors announced a cash dividend of kr 40,000. The dividend will be paid on December 15. The utility bill for October arrives. Amount owed equals kr 3,500 and is payable by November 15. XYZ has performed additional services of kr 50,000 to (another new) client who was not billed before October 31. Make the corresponding adjustment. Make an adjustment to prepaid insurance. Make an adjustment to prepaid rent. Make an adjustment for supplies used, amounting to kr 2,250. Make an adjustment for unpaid salaries, amounting to kr 88,000. Make an adjustment for equipment depreciation (for equipment purchased on October 2). The equipment has a 5-year useful life and an estimated residual value of kr 5,000. Use the straight-line method to compute monthly depreciation expense. Make an adjustment for accrual of interest on the bond. 20 25 27 28 30 31 31 31 31 31 31 31

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