The following transactions pertain to Price Corporation for 20xx: Jan. 1Acquired

Question

The following transactions pertain to Price Corporation for 20xx: Jan. 1Acquired $25,000 cash from the issuance of common stock. Mar. 1 Paid rent for office space for two years, $8,400 cash. Apr. 14Purchased $400 of supplies on account. June 30Received $12,000 cash in advance for services to be performed over the next year July 5 Paid $300 of the accounts payable from April 14th Aug. 1Billed a customer for $24,800 of services provided during July. Sept. 1Paid employees salaries of $18,000 cash. Sept. 9 Received $4,250 cash from accounts receivable. Nov. 2 Paid a $500 cash dividend to the stockholders. Dec 31Adjusted records to recognize the services provided on the contract of June 30. Dec 31 Recorded $1,100 of accrued salaries as of December 31st. Dec 31Recorded the rent expense for the year. (See March 1) Dec 31 Physically counted supplies; $50 on hand at the end of the year. Using the attached Excel spreadsheet, do the following: 1. Record the preceding transactions in the general journal. 2. Post the transactions to the T-accounts 3. Prepare a trial balance. 4. Prepare closing entries and post them to the general journal and the T-accounts. 5. Prepare a trial balance after closing. (Post Closing Trial Balance)

Explanation / Answer

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Date Account Titles Debit Credit 1-Jan Cash    25,000.00 common Stock    25,000.00 (Being Common Stock issued) 1-Mar Prepaid Rent      8,400.00 Cash      8,400.00 (Being Rent Paid) 14-Apr Supplies          400.00 Accounts Payable          400.00 (Being Supplies Purchased) 30-Jun Cash    12,000.00 Unearned Service Revenue    12,000.00 5-Jul Accounts Payable          300.00 Cash          300.00 (Being Cash paid on Account Purchases) 1-Aug Accounts Receivable    24,800.00 Service revenue    24,800.00 (Being Service Revenue billed) 1-Sep Salaries and Wages Expense    18,000.00 Cash    18,000.00 (Bieng Salaries Recorded) 9-Sep Cash      4,250.00 Accounts Receivable      4,250.00 (Being Payment received on account) 2-Nov Dividend          500.00 Cash          500.00

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