(No GST) Hui Yu, lawyer, had the following transactions related to the business
ID: 2516677 • Letter: #
Question
(No GST) Hui Yu, lawyer, had the following transactions related to the business during June. Ignore GST Purchased office furniture for $36000. The furniture will be depreciated over a useful life of 10 years at which time it is expected to have a residual value of $4800. Purchased a 12-month fire insurance policy for $3000. Borrowed $42 000 from the Eastern Bank on a short-term loan. The principal, plus 8% annual interest, will be repaid in 3 months. Purchased supplies for $450. On 30 June, supplies worth $230 remained on hand. Paid $1200 for 1 month's rent for the period 15 June to 15 July. Received an electronic bank transfer from a client for $840 as an advance payment for services to be performed. Only 20% of the work was completed by 30 June. June 1 1 2 11 15 18 28 Received an invoice for $410 for telephone and internet charges for the month Required (a) Prepare the journal entries to record each transaction and prepare any adjusting entries as at 30 June, the end of the accounting year.Explanation / Answer
Date
Accounts Title & Explanation
Debit
Credit
June 1
Office furniture
$36000
Cash
$36000
(For recording purchase of office furniture)
June 1
Prepaid insurance
$3000
Cash
$3000
(For recording purchase of insurance policy)
June 2
Cash
$42000
Short-term loan payable
$42000
(For recosrding short-term loan payable)
June 11
Supplies
$450
Cash
$450
(For recording purchase of supplies)
June 15
Prepaid rent
$1200
Cash
$1200
(For recording prepaid rent)
June 18
Cash
$840
Unearned services revenue
$840
(For recording receipt of unearned services revenue)
June 28
Telephone & Internet Expenses
$410
Telephone & Internet Expenses Payable
$410
(For recording Telephone & Internet Expenses)
June 30
Depreciation expense ($36000 - $4800) / 10 * 12
$260
Accumulated depreciation-Office furniture
$260
(For recording depreciation expense on office furniture)
June 30
Insurance expense ($3000 / 12)
$250
Prepaid insurance
$250
(For recording consumed portion of prepaid insurance)
June 30
Supplies expense ($450 – $230)
$220
Supplies
$220
(For recording consumed supplies)
June 30
Rent expense ($1200 / 2)
$600
Prepaid rent
$600
(For recording used rent expenses)
June 30
Unearned services revenue ($840 * 0.20)
$168
Service revenue
$168
(For recording 20% of Unearned services revenue as service revenue)
June 30
Interest expense ($42000 * 0.08) / 12
$280
Interest payable
$280
(For recording interest expense on short-term borrowings)
Date
Accounts Title & Explanation
Debit
Credit
June 1
Office furniture
$36000
Cash
$36000
(For recording purchase of office furniture)
June 1
Prepaid insurance
$3000
Cash
$3000
(For recording purchase of insurance policy)
June 2
Cash
$42000
Short-term loan payable
$42000
(For recosrding short-term loan payable)
June 11
Supplies
$450
Cash
$450
(For recording purchase of supplies)
June 15
Prepaid rent
$1200
Cash
$1200
(For recording prepaid rent)
June 18
Cash
$840
Unearned services revenue
$840
(For recording receipt of unearned services revenue)
June 28
Telephone & Internet Expenses
$410
Telephone & Internet Expenses Payable
$410
(For recording Telephone & Internet Expenses)
June 30
Depreciation expense ($36000 - $4800) / 10 * 12
$260
Accumulated depreciation-Office furniture
$260
(For recording depreciation expense on office furniture)
June 30
Insurance expense ($3000 / 12)
$250
Prepaid insurance
$250
(For recording consumed portion of prepaid insurance)
June 30
Supplies expense ($450 – $230)
$220
Supplies
$220
(For recording consumed supplies)
June 30
Rent expense ($1200 / 2)
$600
Prepaid rent
$600
(For recording used rent expenses)
June 30
Unearned services revenue ($840 * 0.20)
$168
Service revenue
$168
(For recording 20% of Unearned services revenue as service revenue)
June 30
Interest expense ($42000 * 0.08) / 12
$280
Interest payable
$280
(For recording interest expense on short-term borrowings)
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