Journalize and post closing entries and comlete the closing process!!! July 1 Pu
ID: 2578861 • Letter: J
Question
Journalize and post closing entries and comlete the closing process!!!
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
Dr Cr Jul-01 Equipment A/c Dr 19200 TO Note payble 16000 To cash 3200 Jul-01 Interst exp 80 To Bank 80 ( 16000 x 6% x 1 /12 ) Jul-02 Cash A/c Dr 40000 To Common stock 40000 Jul-03 Prepaid Insurance 1500 Insurance 1500 TO cash a/c 3000 ( assuming december is the last month of the year Jul-03 Prepaid rent 3200 Rent exp. 3200 TO cash 6400 Jul-06 Supplies A/c 3000 To Bank 3000 Jul-10 Cash A/c 960 To Milani brothers 960 Jul-13 Fitxgerald 900 To Revenues 900 Jul-14 Utility payble 320 To Cash 320 Jul-16 Cash A/c 9600 TO advance from Thunder bay technologies 9600 Jul-18 Salary exp. 8800 To cash 8800 Jul-20 Debtors A/c DR 22400 To Revenues 22400 Jul-20 Advertising Exp. 1800 TO Expesnes payble 1800 Jul-23 Advance from Thunder bay technologies 8000 TO revenues 8000 Jul-27 Cash 12000 To debtors 12000 1. Adj of prepaid insurnace - entry already done above 2. Prapaid rent entry already done above 3. Supplies used is 1000/- therefore balacneis closing stock 4. Eq dep - Depreciation Dr 400 and Equipment Cr 400 5. Accural interest entry already done above 6. Salary exp 8800 Dr and Salayble payble 8800 Cr 7. - Utulities exp Dr 640 and utilities paybloe 640 Cr 8. Income tax july Dr 960 and Income tax provision 960 C r
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