July 1 Purchased equipment, paying $3,200 cash and signing a 2-year note payable
ID: 2578439 • Letter: J
Question
July 1 Purchased equipment, paying $3,200 cash and signing a 2-year note payable for $16,000. The equipment has a 4-year useful life. The note has a 6% interest rate which is payable on the first day of each following month 2 Issued 16,000 shares of common stock for $40,000 cash. 3 3 6 9 10 13 14 16 18 20 20 23 27 Paid $3,000 cash for a 12-month insurance policy effective July 1 Paid the first 2 (July and August 2017) months' rent for an annual lease of office space for $3,200 per month. Paid $3,000 for supplies. Visited client offices and agreed on the terms of a consulting project. Bridgeport will bill the client, Connor Productions, on the 20th of each month for services performed Collected $960 cash on account from Milani Brothers. This client was billed in June when Bridgeport performed the service Performed services for Fitzgerald Enterprises. This client paid $900 in advance last month. All services relating to this payment are now completed Paid $320 cash for a utility bill. This related to June utilities that were accrued at the end of June Met with a new client, Thunder Bay Technologies. Received $9,600 cash in advance for future services to be performed Paid semi-monthly salaries for $8,800 Performed services worth $22,400 on account and billed customers Received a bill for $1,800 for advertising services received during July. The amount is not due until August 15. Performed the first phase of the project for Thunder Bay Technologies. Recognized $8,000 of revenue from the cash advance received July 16 Received $12,000 cash from customers billed on July 20 Adjustment data 1. Adjustment of prepaid insurance 2. Adjustment of prepaid rent. 3. Supplies used, $1,000 4. Equipment depreciation, $400 per month. 5. Accrual of interest on note payable 6. Salaries for the second half of July, $8,800, to be paid on August 1 7. Estimated utilities expense for July, $640 (invoice will be received in August) 8. Income tax for July, $960, will be paid in August.Explanation / Answer
Adjusting Journal Entry S. No Date Particulars Dr. Amt. Cr. Amt. 1 31-Jul Insurance Expenses Dr. 250.00 $3,000 / 12 To Prepaid Insurance 250.00 (Record the insurance expenses) 2 31-Jul Rent Expenses Dr. 1,600.00 $3,200 / 2 To Prepaid Rent 1,600.00 (Record the rent exepenses for July) 3 31-Jul Supplies Expenses Dr. 1,000.00 To Supplies 1,000.00 (Record the supplies expenses) 4 31-Jul Depreciation Expenses Dr. 400.00 To Accumulated Depreciation - Equipment 400.00 (Record the depreciation expenses for July) 5 31-Jul Interest Expenses Dr. 80.00 $16,000 X 6% X 1/12 To Interest Payable 80.00 (Record the interest expenses on Notes Payable) 6 31-Jul Salaries Expenses Dr. 8,800.00 To Salary Payable 8,800.00 (Record the Salary due for second half of July) 7 31-Jul Utility Expenses Dr. 640.00 To Utility Payable 640.00 (Record the utilities expenses for July) 8 31-Jul Income Tax Expenses Dr. 960.00 To Income Tax Payable 960.00 (Record the Income Tax expenses for July)
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