Jan 30. Established the business when it acquired $75,000 cash from the issue of

Question

Jan 30. Established the business when it acquired $75,000 cash from the issue of common stock.
Feb 1. Paid rent for office space for 2 years, $12,000 cash.
Mar 1. Borrowed $20,000 cash from National Bank. The note issued had a 9 percent annual rate of interest and matured in one year.
Apr 10. Purchased $6,5000 of supplies on account.
June 1 Paid $27,000 cash for a computer system which had a three year useful life and no salvage value.
July 1. Received $75,000 cash in advance for services to be provided over the next year.
July 20. Paid $24,000 of the accounts payable from April 10.
Aug 15. Billed a customer $32,000 for services provided during August.
Sept 15 Completed a job and received $24,000 cash for services rendered.
Oct. 1 Paid employee salaries of $20,000 cash.
Oct 15 Received $32,000 cash from account receivable.
Nov 16. Billed customers $37,000 for services rendered on account.
Dec 1. Paid a dividend of $8,000 cash to the stockholders.
31. Adjusted records to recognize the services provided on contract of July 1.
31. Recorded the accrued interest on the note to National Bank (see March 1).
31. Recorded the depreciation on the computer system used in the business (see June 1).
31. Recorded $4,500 of accrued salaries as of December 31.
31. Recorded the rent expense for the year (see February 1).
31. Physically counted supplies; $480 was on hand at the end of the period (see April 10)

*** You can either record the preceding transactions in the general journal, post them to T-accounts, or prepare a trial balance... It's up to you, whatever you think is easier.

Explanation / Answer

Jan 30 Cash..............75,000 Common Stock..................75,000 Feb 1 Prepaid Rent........12,000 Cash..............................12,000 Mar 1 Cash............20,000 Note Payable....................20,000 Apr 10 Supplies.........65,000 Accounts Payable................65,000 June 1 Equipment......27,000 Cash...............................27,000 July 1 Cash.............75,000 Unearned Revenue..............75,000 July 20 Accounts Payable....24,000 Cash.....................................24,000 Aug 15 Accounts Receivable.....32,000 Service Revenue..............................32,000 Sep 15 Cash............24,000 Service Revenue....................24,000 Oct 1 Wages Expense......20,000 Cash......................................20,000 Oct 15 Cash.............32,000 Accounts Receivable......................32,000 Nov 16 Accounts Receivable.....37,000 Service Revenue...........................37,000 Dec 1 Retained Earnings..........8,000 Cash........................................8,000 Dec 31 Unearned Revenue..........37,500 Service Revenue.............................37,500 Dec 31 Interest Expense.........1,500 Interest Payable..........................1,500 Dec 31 Depreciation Expense........5,250 Accumulated Depreciation......................5,250 Dec 31 Wages Expense........4,500 Wages Payable...........................4,500 Dec 31 Rent Expense...........6,000 Prepaid Rent..........................6,000 Dec 31 Supplies Expense.......64,520 Supplies.....................................64,520

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