Question

On October 1, 2019, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. Rey adopts the calendar year for reporting purposes and expects to prepare the company’s first set of financial statements on December 31, 2019. The company’s initial chart of accounts follows.

Account No. Account No.

Cash 101 Common Stock 307 Accounts Receivable 106 Dividends 319 Computer Supplies 126 Computer Services Revenue 403 Prepaid Insurance 128 Wages Expense 623 Prepaid Rent 131 Advertising Expense 655 Office Equipment 163 Mileage Expense 676 Computer Equipment 167 Miscellaneous Expenses 677 Accounts Payable 201 Repairs Expense—Computer 684

Oct. 1 S. Rey invested $52,000 cash, a $24,000 computer system, and $9,000 of office equipment in the company in exchange for common stock.

2 The company paid $3,260 cash for four months' rent. Hint: Debit Prepaid Rent for $3,260.

3 The company purchased $1,330 of computer supplies on credit from Harris Office Products.

5 The company paid $2,040 cash for one year's premium on a property and liability insurance policy. Hint: Debit Prepaid Insurance for $2,040.

6 The company billed Easy Leasing $5,100 for services performed in installing a new Web server.

8 The company paid $1,330 cash for the computer supplies purchased from Harris Office Products on October 3.

10 The company hired Lyn Addie as a part-time assistant.

12 The company billed Easy Leasing another $2,200 for services performed.

15 The company received $5,100 cash from Easy Leasing as partial payment on its account.

17 The company paid $795 cash to repair computer equipment that was damaged when moving it.

20 The company paid $1,693 cash for advertisements published in the local newspaper.

22 The company received $2,200 cash from Easy Leasing on its account.

28 The company billed IFM Company $5,308 for services performed.

31 The company paid $805 cash for Lyn Addie’s wages for seven days' work.

31 The company paid a $2,600 cash dividend.

Nov. 1 The company reimbursed S. Rey in cash for business automobile mileage allowance (Rey logged 1,000 miles at $0.22 per mile).

2 The company received $4,933 cash from Liu Corporation for computer services performed.

5 The company purchased computer supplies for $1,090 cash from Harris Office Products.

8 The company billed Gomez Co. $6,268 for services performed.

13 The company agreed to perform future services for Alex’s Engineering Co. No work has yet been performed.

18 The company received $2,508 cash from IFM Company as partial payment of the October 28 bill.

22 The company paid $240 cash for miscellaneous expenses. Hint: Debit Miscellaneous Expense for $240.

24 The company completed work and sent a bill for $4,650 to Alex’s Engineering Co.

25 The company sent another bill to IFM Company for the past-due amount of $2,800.

28 The company reimbursed S. Rey in cash for business automobile mileage (1,200 miles at $0.22 per mile).

30 The company paid $1,610 cash for Lyn Addie's wages for 14 days' work.

30 The company paid a $1,600 cash dividend.

Required: 1. Prepare journal entries to record each of the above transactions for Business Solutions. 2. Prepare ledger accounts (in balance column format) and post the journal entries from requirement 1 to them. 3. Prepare a trial balance as of the end of November.

Answer 1

,
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sanata Rey cusnel Emrtried Creda't Harsis Oftice freducfs frc A3 ২০ Cheing pare faymenñe made in cash) Oef 12 Eaay leaalng Ate CReing 61l raiad on Eany leasing servi ces perfarmad) Oct. esh to Eaxy leasing tre Cheing jule arf final paqmane f Gill raised oan A. TD Cash Ayc Cfseing east pand or fherepair f compicler) Adventisemee Exp ye. Aof.20 1693 { & १২ CAeirg cah paued fpor aduesfisemiee m locaf newupaper.) Oot 22 Cask 22ero Coeing face rawrind on Oct 2) FFM Compary 5308 5308 Cacing billrae'saf on FFM company

Sanata Rey Jousnal Enfried Gradhst Befyt Oot 31 Wages fye (Berng wagen paidato Lyn Addie) Aividend ATe Oot 31 cauk) Chesing dividend pand Dv. s. Rey's Capital aye Hovl 220 alkersance given (Reing audemobile mileoge in cash to s. Rey. 4933 Nov.2 4933 to Cash Saler (Being caat received upon sale to Liu Corporation- Seavicer performes) 1090 Novis Puscfonse Product o Harr's Ogice (Aciy Cmputer sugplico pusehared from Harres Office Producti) Gromez Co. *70 Nov 8 56268 Po Sales Ceing Gllnaed a homez Co. for sesvice farforimed> 56,268 No.18 Camer Ayc 2508 Cécing pare paymante againce 6 11 veceivad)

Sanafa Roy. Jeusaal Efried Besif r. Mrrcellaneat Esp Y. CAeing couh A.and for mcecallaneoua e) Aler's Eagineering Co, drc lov:24 465 TO Salea fya (Being billra'seed fror seavices parformed) No Jouinal Endy Hov 28 261 Gmainerd Quf» mo Gile mileage xeimbussed to s. Rey - 120o milma Cheing Woges do. Cash Aca (Aesrg Giages for 14 doye pard to Lyn Addie} Agviden f flova 30 1600 (eeing canh đividend pard)