The transactions completed by PS Music during June 2016 were described at th Cha

Question

The transactions completed by PS Music during June 2016 were described at th Chapter 1. The following transactions were completed during July, the second nd the business's operations: g Problem the end d ond month e for July 1. Peyton Smith made an additional investment in PS Music in exchange f common stock by depositing $5,000 in PS Music's checking account. cy Peyton decided to rent office space near a local music store. Paid rent for July $1,750. 1. Instead of continuing to share office space with a local real estate agen 1. Paid a premium of $2,700 for a comprehensive insurance policy covering 2. Received $1,000 on account. 3. On behalf of PS Music, Peyton signed a contract with a local radio station, lia ity, theft, and fire. The policy covers a one-year period. KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600. Any additional hours beyond 80 will be billed to KXMD at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment for the first two months. 3. Paid $250 on account. 4. Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5. Purchased office equipment on account from Office Mart, $7,500. 8. Paid for a newspaper advertisement, $200. 11. Received $1,000 for serving as a disc jockey for a party 13. Paid $700 to a local audio electronics store for rental of digital recording equi do repdonis nd partime assitant. ment.

Explanation / Answer

Date Account Heads Debit Credit Jul-01 Cash 5000 Common stock 5000 Office rent expense 1750 Cash 1750 Miscellaneous expenses(Insurance for 1 month-2700/12 225 Prepaid Insurance 2475 Cash 2700 2 Cash 1000 Accounts Payables 1000 3 Cash 7200 Fees earned 3600 Unearned Revenue 3600 3 Accounts receivables 250 Cash 250 4 Miscellaneous expenses 900 Cash 900 5 Office equipment 7500 Accounts payables 7500 8 Advertising expense 200 Cash 200 11 Cash 1000 Fees earned 1000 13 Equipment rent expense 700 Cash 700 14 Wages 1200 Cash 1200 16 Cash 2000 Fees earned 2000 18 Supplies 850 Accounts payables 850 21 Music expense 620 cash 620 22 Advertising expense 800 Cash 800 23 Cash 750 Accounts receivables 1750 Fees earned 2500 27 Miscellaneous expense 915 Cash 915 28 Wages 1200 Cash 1200 29 Miscellaneous expense 540 Cash 540 30 Cash 500 Accounts receivables 1000 Fees earned 1500 31 Cash 3000 Fees earned 3000 31 Music expense 1400 cash 1400 31 Dividends 1250 Cash 1250 TRIAL BALANCE as on July 1,2016 Balance Debit Credit Debit Credit Cash 3920 3920 Accounts Receivables 1000 1000 Supplies 170 170 Pre-paid insurance 0 0 Office equipment 0 0 Accounts Payables 250 250 Unearned revenue 0 0 Common stock 4000 4000 Dividends 500 500 Fees earned 6200 6200 Wages expense 400 400 Office rent expense 800 800 Equipment rent expense 675 675 Utilities expense 300 300 Music expense 1590 1590 Advertising expense 500 500 Supplies expense 180 180 Miscellaneous expense 415 415 10450 10450 10450 10450 TRIAL BALANCE as on July 1,2016 Additions during July Balance as on july-31 Debit Credit Debit Credit Debit Credit Cash 3920 6025 9945 Accounts Receivables 1000 3000 4000 Supplies 170 850 1020 Pre-paid insurance 0 2475 2475 Office equipment 0 7500 7500 Accounts Payables 250 9350 9600 Unearned revenue 0 3600 3600 Common stock 4000 5000 9000 Dividends 500 1250 1750 Fees earned 6200 13600 19800 Wages expense 400 2400 2800 Office rent expense 800 1750 2550 Equipment rent expense 675 700 1375 Utilities expense 300 300 Music expense 1590 2020 3610 Advertising expense 500 1000 1500 Supplies expense 180 180 Miscellaneous expense 415 2580 2995 10450 10450 31550 31550 42000 42000 Accounts Payables Debit Credit Jul-01 Opening balance 250 2 Cash recd. 1000 5 Office equipment 7500 18 Supplies 850 9600 Accounts receivables Jul-01 Opening balance 1000 3 Cash paid 250 23 Fees earned 1750 30 Fees earned 1000 4000 Advertising expense Jul-01 Opening balance 500 8 Cash paid 200 22 Cash paid 800 1500 Cash a/c Jul-01 Opening balance 3920 Common stock issue 5000 Office rent expense 1750 Insurance 2700 2 On a/c receipt 1000 3 Fees earned 7200 On a/c payment 250 4 Attorney fees(Miscell.) 900 8 Advertising expense 200 11 Fees earned 1000 13 Equipment rent expense 700 14 Wages 1200 16 Fees earned 2000 21 Music expense 620 22 Advertising expense 800 23 Fees earned 750 27 Electricity bill(Misell.) 915 28 Wages 1200 29 Miscllaneous expense 540 30 Fees earned 500 31 Fees earned 3000 Music expense 1400 Dividends 1250 24370 14425 Debit balance 9945 Common stock Jul-01 Opening balance 4000 Cash 5000 9000 Dividends Jul-01 Opening balance 500 Jul-31 Cash 1250 1750 Equipment rent expense Jul-01 Opening balance 675 Jul-13 Cash 700 1375 Fees earned Jul-01 Opening balance 6200 3 Cash 3600 11 Cash 1000 16 Cash 2000 23 Cash 750 Accounts receivables 1750 30 Cash 500 Accounts receivables 1000 31 Cash 3000 19800 Miscellaneous expense Jul-01 Opening balance 415 1 Cash(Insurance for 1 month-2700/12 225 4 Cash-Attorney fees 900 Jul-27 Cash-Electricity 915 29 Cash 540 2995 Music expense Jul-01 Opening balance 1590 21 Cash 620 31 Cash 1400 3610 Office equipment Jul-05 Accounts payables 7500 Office rent expense Jul-01 Opening balance 800 Cash 1750 2550 Prepaid Insurance Jul-01 Cash 2475 Supplies Jul-01 Opening balance 170 Jul-18 Accounts Payables 850 1020 Unearned Revenue Jul-03 Cash 3600 Wages Jul-01 Opening balance 400 Jul-14 Cash 1200 Jul-28 Cash 1200 2800

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