The corporation performs adjusting entries monthly. Closing entries are performe

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The corporation performs adjusting entries monthly. Closing entries are performed annually on December 31. During December, the corporation entered into the following transactions: Dec 1. Issued to John and Patty Driver 20,000 shares of capital stock in exchange for a total of $200,000 cash. Dec 1 Purchased for $240,000 all of the equipment formerly owned by Rent It. Paid $140,000 cash and issued a one year note payable for $100,000. The note, plus all 12 months of accrued interest, are due November 30, 2012.Dec 1 Paid $12,000 to Shapiro Realty as three months advance rent on the rental yard and office formerly occupied by Rent itDec 4 Purchased office supplies on account from Modern Office Co $1,000. Payment due in 30 days. (These supplies are expected to last for several months, debit the Office Supplies asset account)Dec 8 received $8,000 cash as advance payment on equipment rental from McNamer Construction Company. (Credit Unearned Rental Fees)Dec. 12 Paid salaries for the first two weeks in December $5,200.Dec 15 Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to $18,000 of which $12,000 was received in cash.Dec 17 Purchased on account from Earth Movers, Inc $600 in parts needed to repair a rental tractor. (Debit an expense account) Payment is due in 10 daysDec. 23 colected $2,000 of the accounts receivable recorded on December 15.Dec 26 Rented a backhoe to Mission Landscaping at a price of $250 per day, to be paid when the backhoe is returned. Mission Landscaping expects to keep the backhoefor about two or three weeks.Dec 26 Paid biweekly salaries, $5,200Dec 27 Paid the account payable to Earth Movers, Inc, $600.Dec 28 Declared a dividend of 10 cents per share, payable on January 15, 2012
Dec 29 Susquehana Equipment Rentals was named, along with Mission Landscaping and Colier Construction as a co defendant in a $25,000 lawsuit filed on behalf of Kevin Davenport. Mission Landscaping had left the rented backhoe in a fenced construction site owned by Collier construction. After working hours on December 26, Davenport had climbed the fence to play on parked construction equipment. While playing on the backhoe, he feel and broke his arm. Te extent of the company

Explanation / Answer

Cash 1/12 200,000 140,000 1/12 8/12 8,000 12,000 1/12 15/12 12,000 5,200 12/12 23/12 2,000 5,200 26/12 31/12 15,600 600 27/12 9,600 29/12 237,600 172,600 Balance 65,000 -------------------------------------------------- Capital Stock 200,000 1/12 Balance 200,000 -------------------------------------------------- Salaried Expense 12/12 5,200 26/12 5,200 26/12 1,400 Balance 11,800 --------------------------------------------------- Accounts Receivable 15/12 6,000 2,000 23/12 31/12 1,500 31/12 4,400 Balance 9,900 --------------------------------------------------- Rental Equipment 1/12 240,000 Balance 240,000 --------------------------------------------------- Notes Payable 100,000 1/12 Balance 100,000 --------------------------------------------------- Rental Fees Earned 18,000 15/12 20,000 31/12 3,700 8/12 1,500 31/12 Balance 43,200 --------------------------------------------------- Maintenance Expense 17/12 600 Balance 600 --------------------------------------------------- Prepaid Rent 1/12 12,000 4,000 Balance 8,000 --------------------------------------------------- Office Supplies 4/12 1,000 400 31/12 Balance 600 --------------------------------------------------- Dividends 28/12 2,000 Balance 2,000 -------------------------------------------------- Dividend Payable 2,000 28/12 Balance 2,000 -------------------------------------------------- Unearned Rental Fees 8/12 3,700 8,000 8/12 Balance 4,300 -------------------------------------------------- Accounts Payable 600 1,000 4/12 600 17/12 700 31/12 Balance 1,700 -------------------------------------------------- Unexpired Insurance 29/12 9,600 Balance 9,600 -------------------------------------------------- Utility Expense 31/12 700 Balance 700 -------------------------------------------------- Rent Expense 1/12 4,000 Balance 4,000 -------------------------------------------------- Interest Expense 1/12 500 Balance 500 -------------------------------------------------- Interest Payable 500 1/12 Balance 500 -------------------------------------------------- Depreciation Expense 1/12 2,500 Balance 2,500 -------------------------------------------------- Accumulated Depreciation 1/12 2,500 Balance 2,500 -------------------------------------------------- Supplies Expense 31/12 400 Balance 400 -------------------------------------------------- Salaried Payable 26/12 1,400 Balance 1,400 -------------------------------------------------- Income Tax Expense 31/12 9,080 Balance 9,080 -------------------------------------------------- Income Tax Payable 9,080 31/12 Balance 9,080

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