On October 1, 2016, Bernie the Bison launched a tUImpU BISON Systems, which prov

Question

On October 1, 2016, Bernie the Bison launched a tUImpU BISON Systems, which provides consulting services, computer system installations, and custom program development. Bernie adopts the calendar year for reporting purposes and expects to prepare the company's first set of financial statements on December 31, 2016. The company's initial chart of accounts follows. No. Account 101 Common Stock No Account Cash Accounts Receivable 106Dividends Computer Supplies 126Computer Services Revenue 403 307 319 623 655 676 Computer Equipment167 Miscellaneous Expenses 677 Accounts Payable 201Repairs Expense-Computer684 Prepaid Insurance Prepaid Rent Office Equipment 128Wages Expense 131 Advertising Expense 163Mileage Expense Required 1. Prepare journal entries to record each of the following transactions for Success Systems. Oct. 1Bernie the Bison invested $55,000 cash, a $20,000 computer system, and $8,000 of office equipment in the company in exchange for its common stock 2The company paid $3,300 cash for four months' rent. (Hint: Debit Frepaid Rent for $3,300.) 3The company purchased $1,420 of computer supplies on credit from Harris Office Products 5The company paid $2,220 cash for one year's premium on a property and liability insurance policy. (Hint: Debit Prepaid Insurance for $2,220.) 6The company billed Easy Leasing $4,800 for services performed in installing a new Web server. 8The company paid $1,420 cash for the computer supplies purchased from Harris Office Products on October3 10 The company hired Lyn Addie as a part-time assistant for $125 per day, as needed 12The company billed Easy Leasing another $1,400 for services performed. 15The company received $4,800 cash from Easy Leasing as partial payment on its account 17The company paid $805 cash to repair computer equipment that was damaged when movina it

Explanation / Answer

1. In the books of Bison Systems:

Contd. :

Date General Journal Debit Credit $ $ Oct 1 Cash 55,000 Computer System 20,000 Office Equipment 8,000 Common Stock 83,000 Oct 2 Prepaid Rent 3,300 Cash 3,300 Oct 3 Computer Supplies 1,420 Accounts Payable 1,420 Oct 5 Prepaid Insurance 2,220 Cash 2,220 Oct 6 Accounts Receivable 4,800 Computer Services Revenue 4,800 Oct 8 Accounts Payable 1,420 Cash 1,420 Oct 10 No journal entry rquired Oct 12 Accounts Receivable 1,400 Computer Services Revenue 1,400 Oct 15 Cash 4,800 Accounts Receivable 4,800 Oct 17 Repairs Expense : Computer 805 Cash 805 Oct 20 Advertising Expense 1,940 Cash 1,940 Oct 22 Cash 1,400 Accounts Receivable 1,400 Oct 28 Accounts Receivable 5,208 Computer Services Revenue 5,208 Oct 31 Wages Expense 875 Cash 875 Oct 31 Dividends 3,600 Cash 3,600 Nov 1 Mileage Expense 320 Cash 320 Nov 2 Cash 4,633 Computer Services Revenue 4,633 Nov 5 Computer Supplies 1,125 Cash 1,125 Nov 8 Accounts Receivable 5,668 Computer Srvices Revenue 5,668

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