1. On 1 December, 2005, Fleet company paid $4,500 rent for some office space which was debited in full to the prepaid rent account. The rent was for three months. Assuming Sally’s accounting year ends on 3 1 December: give the adjusting entry required on 21 December. 2005.
2. On 1 October, Taylor Bicycle Store had an inventory of 20 ten speed bicycles at a cost of $150 each. During the month of October the following transactions occurred. Assume John uses a perpetual inventory system.
Oct 4 Purchased 205 bicycles at a cost of $150 each from the LX Bicycle Supply company terms 2/10 n/30.
Oct 5 Paid freight of $780 on the 4 October purchased
Oct 6 Sold 8 bicycles from the 1 October inventory to XYZ Team for $250 each, terms 2/10, n/30.
Oct 7 Received credit from the LX Bicycle Supply company for the return of 12 defective bicycles.
Oct 13 Issued a credit memo to XYZ Team for the return of defective bicycles
Oct 14 Paid LX Bicycle Supply company in full, less discount.
Prepare the journal entries to record the transactions assuming the company uses a perpetual inventory system.