Barbara Jones opened Barb\'s Book Business on February 1. You have been hired to

Question

Barbara Jones opened Barb's Book Business on February 1. You have been hired to maintain the company's financial records. The following transactions occurred in February, the first month of operations a. Received shareholders' cash contributions on February 1 totaling $11,000 to form the corporation, issued 1,000 shares of common stock b. Paid $3,345 cash on February 2 for three months' rent for office space. TIP: For convenience, simply record the full amount of the payment as an asset (Prepaid Rent). At the end of the month, this accou will be adjusted to its proper balance c. Purchased and received supplies on February 3 for $345 cash d. Signed a promissory note on February 4, payable in two years; deposited $14.600 in the company's bank account e. On February 5, paid cash to buy equipment for $5,200 and land for $9,400 f Placed an advertisement in the local paper on February 6 for $800 cash g. Recorded sales on February 7 totaling $2.200: $1,520 was in cash and the rest on accounts receivable h. Collected accounts receivable of $130 from customers on February 8 i. On February 9, repaired one of the computers for $185 cash TIP: Most repairs invdve costs that do not provide additional future economic benefits. j Incurred and paid employee wages on February 28 of $480

Explanation / Answer

S.No Accounting titles & Explanations Debit Credit 1) Cash $11,000.00 Common stock $11,000.00 To Record Issuance of Common stock 2) prepaid rent $3,345.00 cash $3,345.00 To Record Prepaid Rent Paid 3) Supplies $345.00 cash $345.00 To Record Purchase of Supplies 4) Bank $14,600.00 notes payable $14,600.00 To Issue a Note Payable 5) Equipment $5,200.00 land $9,400.00 cash $19,200 TO Record Purchase of of Equipment & Land 6) Advertising expense $800.00 cash $800.00 TO Record Advertising Expense 7) Cash $1,520.00 Accounts receivable $680.00 sales $2,200.00 To Record Sales agst AR and Cash 8) Cash $130.00 Accounts receivable $130.00 To Record received cash agst AR 9) Repairs & maintenance $185.00 cash $185.00 To Record Repair & Mainta. Expense 10) Wage expense $480.00 cash $480.00 To Record Employee wages expense

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