Reference no: EM132658074

Company experienced the following transactions and events in July 2020.

(1) On 1 July 2020, the company signed a Letter of Intent with Benson Company to purchase a new equipment costing $30,000. No deposit was made. The equipment will be delivered in September 2020.

(2) On 1 July 2020, the company purchased a 6-month insurance policy for $1,200.

(3) On 1 July 2020, the company borrowed $50,000 by signing a 12-month 12% note payable. The entire amount, plus interest, is due one year later.

(4) On 10 July 2020, the company purchased $5,000 supplies on credit.

(5) On 15 July 2020, Clarke Company files a lawsuit against Quake Company for $200,000. Quake's Company's attorney assesses that the lawsuit is without merit.

(6) On 20 July 2020, the company paid $10,000 cash for advertisement published in the local newspaper.

(7) On 25 July 2020, the company decided to hire one more full-time staff at a monthly salary of $4,000. The new staff will join the company on 1 August 2020.

(8) On 28 July 2020, the company completed a $20,000 job that has not been billed.

(9) On 31 July 2020, the company paid $12,500 to its employees for the month of July 2020.

Problem 1: Analyse the above and prepare the necessary entries to describe them for the month of July 2020.