Aracel Engineering completed the following transactions in the month of June. Je

Question

Aracel Engineering completed the following transactions in the month of June. Jenna Aracel, the owner, invested $175,000 cash, office equipment with a value of $5,200, and $76,000 of drafting equipment to launch the company in exchange for common stock. The company purchased land worth $56,000 for an office by paying $8,000 cash and signing a long-term note payable for $48,000. The company purchased a portable building with $54,000 cash and moved it onto the land acquired in b. The company paid $2,600 cash for the premium on an 18-month insurance policy. The company completed and delivered a set of plans for a client and collected $6,200 cash. The company purchased $32,000 of additional drafting equipment by paying $11,900 cash and signing a long-term note payable for $20,100. The company completed $18,000 of engineering services for a client. This amount is to be received in 30 days. The company purchased $2,000 of additional office equipment on credit. I. The company completed engineering services for $25,000 on credit. The company received a bill for rent of equipment that was used on a recently completed job. The $1.409 rent cost must be paid within 30 days. The company collected $7,000 cash in partial payment from the client described in transaction g. The company paid $2,400 cash for wages to a drafting assistant. The company paid $2,000 cash to settle the account payable created in transaction h. The company paid $1,105 cash for minor maintenance of its drafting equipment. The company paid $10,170 cash in dividends. The company paid $2,400 cash for wages to a drafting assistant. The company paid $4,000 cash for advertisements on the web during June. Required: 1. Prepare general journal entries to record these transactions using the following titles: Cash (101); Accounts Receivable (106); Prepaid Insurance (108); Office Equipment (163); Drafting Equipment (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); Common Stock (307); Dividends (319); Engineering Fees Earned (402); Wages Expense (601); Equipment Rental Expense (602); Advertising Expense (603); and Repairs Expense (604).

Explanation / Answer

Answer :

a) Cash Dr. 175000

Office Equipment dr 5200

Drafting equipment Dr. 76000

to Common stock A/c 256200

(being common stock issued )

b) Land A/c Dr. 56000

to Cash 8000

to Note Payable 48000

(being land purchased)

c) Building A/c 54000

to Cash 54000

(building purchase )

d) Prepaid Insurance dr.2600

to Cash 2600

(Insurance premium paid )

e) Cash A/c Dr. 6200

to Engineering fees earned 6200

(Engineering fees earned )

f) Drafting Equipment Dr. 32000

to Cash 11900

to Note Payable 20100

g) Account Receivable Dr. 18000

to Engineering fees earned 18000

(being fees earned )

h) office Equipment Dr. 2000.

to Accounts payable 2000

( office equipment purchased )

i) Account receivable dr 25000

to engineering service 25000

(being amount earned )

j) Equipment rental expense Dr.1409

to Accounts Payable 1409

(being rental expense recorded)

k) Cash A/c Dr.7000

to Account receivable 7000

l) Wages Expense Dr.2000

   to Cash 2000

( being wages paid to assistant )

m) Accounts Payable Dr. 2000

   to Cash 2000

( amount paid for equipment )

n) Repair expense Dr. 1015

   to Cash 1015

(amount paid for maintainence )

o) Dividend A/c Dr. 10170

   to Cash 10170

(being dividend paid )

p) Wages Expense Dr. 2400

   to Cash 2400

(being wages paid)

q) Advertisment Expense Dr. 4000

   to Cash 4000

(advertiment expense paid)

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.