Journalizing January Transactions for Ivanhoe Company

How to record the January transactions of Ivanhoe Company in the ledger?

Can you provide journal entries for the key financial transactions that took place during January?

Recording January Transactions:

To record the January transactions of Ivanhoe Company in the ledger, you need to create journal entries for each transaction. Let's break it down:

On January 1, Ivanhoe Company borrowed $18,000 in cash from Apex Bank on a 4-month, 5%, $18,000 note. The journal entry for this transaction would be:

Jan. 1: Debit Cash $18,000, Credit Notes Payable $18,000.

For the sale of merchandise for cash totaling $7,420, including 6% sales taxes on January 5, the journal entry would be:

Jan. 5: Debit Cash $7,420, Credit Sales Revenue (excluding taxes) $7,000, Credit Sales Tax Payable $420.

When services were performed for customers with advance payments of $10,200 on January 12, the entry would be:

Jan. 12: Debit Unearned Service Revenue $10,200, Credit Service Revenue $10,200.

Payment to the state treasurer's department for sales taxes collected in December 2021, $7,000, on January 14 would result in the following entry:

Jan. 14: Debit Sales Tax Payable $7,000, Credit Cash $7,000.

Finally, for the sale of 540 units of a new product on credit at $47 per unit, plus 5% sales tax on January 20, the entry would be:

Jan. 20: Debit Accounts Receivable (total of units sold including tax), Credit Sales Revenue, Credit Sales Tax Payable.

For the wages earned by employees in January, the entry would involve debiting Wage Expense and crediting FICA, federal income tax, state income tax withholdings, along with a credit to Wages Payable for the net pay.