1. Journalize each transaction. You do not have to include a brief explanation.
ID: 2595556 • Letter: 1
Question
1. Journalize each transaction. You do not have to include a brief explanation. Prepare an adjusted trial balance as of December 31, 20XX.
Date
Transaction or Event
Dec 1
LeBron invests $1,000,000 cash into Phi Slamma Jamma, Inc. in exchange for 100,000 shares of common stock. Each share of common stock has a par value of $1 and the right to vote. LeBron is the sole shareholder. He elects himself to the company’s board of directors and hires Kyrie Irving to be his CEO.
Dec 1
PSJ, Inc. pays $96,000 to rent an office in downtown Cleveland for 12 months.
Dec 1
Acquired $50,000 of office equipment. Paid $20,000 of cash as a down payment and agreed to pay the balance in nine months. Interest accrues at four percent annually.
Dec 1
Purchases office supplies from Akron Supply Co. for $25,000 on account.
Dec 1
PSJ, Inc. signs a contract to provide services to clients ratably over the next eight months. PSJ, Inc. collects $200,000 cash.
Dec 10
PSJ, Inc. provides $300,000 of services to clients on account using the credit terms 2/10, N/30.
Dec 15
Issued check #1 to Kyrie Irving for $50,000 and promised to pay him another $30,000 in three months for services provided in the first two weeks on the job. Do not worry about payroll tax liabilities.
Dec 20
Issued check #2 to Akron Supply Co. for $15,000.
Dec 31
The board of directors declared a $.05 per share dividend to be paid on Jan 15, 2017.
Dec 31
PSJ, Inc. repurchased 10,000 shares of LeBron’s stock for $20 per share.
Dec 31
$2,000 of office supplies are on hand. The office equipment should last eight years and be worth $2,000 eight years from now. PSJ, Inc. uses the straight-line method. Some of the prepaid rent has expired. Some of the service revenue work has been completed.
please help!
Date
Transaction or Event
Dec 1
LeBron invests $1,000,000 cash into Phi Slamma Jamma, Inc. in exchange for 100,000 shares of common stock. Each share of common stock has a par value of $1 and the right to vote. LeBron is the sole shareholder. He elects himself to the company’s board of directors and hires Kyrie Irving to be his CEO.
Dec 1
PSJ, Inc. pays $96,000 to rent an office in downtown Cleveland for 12 months.
Dec 1
Acquired $50,000 of office equipment. Paid $20,000 of cash as a down payment and agreed to pay the balance in nine months. Interest accrues at four percent annually.
Dec 1
Purchases office supplies from Akron Supply Co. for $25,000 on account.
Dec 1
PSJ, Inc. signs a contract to provide services to clients ratably over the next eight months. PSJ, Inc. collects $200,000 cash.
Dec 10
PSJ, Inc. provides $300,000 of services to clients on account using the credit terms 2/10, N/30.
Dec 15
Issued check #1 to Kyrie Irving for $50,000 and promised to pay him another $30,000 in three months for services provided in the first two weeks on the job. Do not worry about payroll tax liabilities.
Dec 20
Issued check #2 to Akron Supply Co. for $15,000.
Dec 31
The board of directors declared a $.05 per share dividend to be paid on Jan 15, 2017.
Dec 31
PSJ, Inc. repurchased 10,000 shares of LeBron’s stock for $20 per share.
Dec 31
$2,000 of office supplies are on hand. The office equipment should last eight years and be worth $2,000 eight years from now. PSJ, Inc. uses the straight-line method. Some of the prepaid rent has expired. Some of the service revenue work has been completed.
Explanation / Answer
Date Account titles Debit Credit Dec. 1 Cash 1000000 Common stock 100000 Paid in capital in excess of par 900000 (LeBron invests $1,000,000 cash into Phi Slamma Jamma, Inc. in exchange for 100,000 shares of common stock) Dec. 1 Prepaid rent 96000 Cash 96000 ( pays $96,000 to rent an office ) Dec. 1 Office equipment 50000 Cash 20000 Accounts payable 30000 (Acquired $50,000 of office equipment) Dec. 1 Office supplies 25000 Cash 25000 (Purchases office supplies from Akron Supply Co) Dec. 1 Cash 200000 Unearned service revenue 200000 (signs a contract to provide services to clients ratably over the next eight months. collects $200,000 cash) Dec. 10 Accounts receivable 300000 Service revenue 300000 (provides $300,000 of services to clients on account) Dec. 15 Salary expenses 50000 Cash 50000 (Issued check #1 to Kyrie Irving for $50,000) Dec. 20 Accounts payable 15000 Cash 15000 (Issued check #2 to Akron Supply Co. for $15,000) Dec 31. Dividend paid 5000 Dividend payable (100000*0.05) 5000 (The board of directors declared a $.05 per share dividend) Dec 31. Treasury stock 200000 Cash (10000*20) 200000 (repurchased 10,000 shares) Dec 31. Supplies expense (25000-2000) 23000 Office supplies 23000 (Suuplies used) Dec 31. Depreciation expense 6000 Accumulated depreciation [(50000-2000)/8] 6000 (Depreciation provided) Dec 31. Rent expense (96000/12) 8000 Prepaid rent 8000 (Some of the prepaid rent has expired) Dec 31. Unearned service revenue 25000 Service revenue (200000/8) 25000 (Some of the service revenue work has been completed) Dec 31. Salary expenses 30000 Salary payable 30000 (Salary due) Dec 31. Interest expense 100 Interest payable (50000-20000)*4%*1/12 100 (Interest due on credit availed on equipment purchase) Adjusted trial balance Debit Credit Cash 794000 Prepaid rent 88000 Office supplies 2000 Accounts receivable 300000 Office equipment 50000 Accumulated depreciation 6000 Accounts payable 15000 Unearned service revenue 175000 Dividend payable 5000 Salary payable 30000 Interest payable 100 Treasury stock 200000 Common stock 100000 Paid in capital in excess of par 900000 Service revenue 325000 Salary expenses 80000 Dividend paid 5000 Supplies expense 23000 Depreciation expense 6000 Rent expense 8000 Interest expense 100 1556100 1556100
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