Construction, Inc. employs 40 individuals who work 8 hours a day and are paid hourly. Each employee earns one day paid sick leave and one day paid vacation a month if he or she works full-time in the month. Vacations earned in one year can be used in the following years while sick leaves can be used as they are earned. The following information pertains to vacation earned in 2017 and used in 2019.
Vacations Vacations Vacation earned
Earned in 2018 earned in 2018 and used in 2019 in 2019
400 days 300days 420 days
The average pay rates are $15/hour in 2018 and $18/hour in 2019.
Instructions: prepare any necessary journal entries for
1) Vacations earned in 2018.
2) Vacations earned in 2018 but used in 2019.
3) Vacations earned in 2019
sold 20,000 shares of $1,000 par value, 8%, 10-year debenture bonds on 1/1/2018. The bonds will pay interests on 12/31 of each year. The market interest rate was 4% as of 1/1/2018. retired these bonds for $19,500,000 on 1/1/2020.
Instructions: prepare any necessary journal entries for the followings using the effective interest method.
1) The issuance of the bonds.
2) Interest expense accrued in 2018 and 2019.
3) Retirement of the bonds on 1/1/2020.
The following information pertains to stock transactions of Hawk, Inc. during 2019.
On 1/11/2019, Hawk issued 1,000,000 shares of common stock for $110/share. Its par is $100/share.
On 7/1/2019, Hawk reacquired 150,000 shares of its common stock at $96/share.
On 7/15/2019, Hawk reacquired 80,000 shares of its common stock at $98/share.
On 8/1/2019, Hawk sold 90,000 shares of the treasury stock for $101/share.
On 11/1/2019, Hawk sold 120,000 shares of the stock reacquired for $90/share.
On 12/31/2019, Hawk retired the remaining 20,000 shares of the stock reacquired.
Instructions: Prepare any necessary journal entries for the above transactions using the FIFO flow
– the cost method
– the par value method