Question

On December 1, Jim Smith began an auto repair shop, Smith Quality Automotive. The following transactions occurred during December: Dec 1 Smith contributed $75,000 cash to the business in exchange for capital. Dec 1 Purchased $14,000 of equipment paying cash. Dec 1 Paid $2,100 for a six-month insurance policy starting on December 1. Dec 9 Paid $21,000 cash to purchase land to be used in operations. Dec 10 Purchased office supplies on account, $2,600. Dec 19 Borrowed $30,000 from the bank for business use. Smith signed a note payable to the bank in the name of the business. The note is due in five years. Dec 22 Paid $1,200 for advertising expenses. Dec 26 Paid $800 on account. Dec 28 The business received a bill for utilities to be paid in January, $320. Dec 31 Revenues earned during the month included $17,000 cash and $3,800 on account. Record as a compound entry. Dec 31 Paid employees' salaries $3,700 and building rent $1,300. Record as a compound entry. Dec 31 The business received $1,260 for auto screening services to be performed next month. Dec 31 Smith withdrew cash of $6,000. 1.prepare journal entry 2.post journal entry in T account 3.enter info from T account into Unadjusted Trial Balance

Answer 1

Smith Quality Automotive
Journal entries
Date	Account	Debit	Credit
1-Dec	Cash	$     75,000
	Capital		$     75,000
1-Dec	Equipment	$     14,000
	Cash		$     14,000
1-Dec	Prepaid Insurance	$        2,100
	Cash		$        2,100
9-Dec	Land	$     21,000
	Cash		$     21,000
10-Dec	Office Supplies	$        2,600
	Accounts Payable		$        2,600
19-Dec	Cash	$     30,000
	Notes Payable		$     30,000
22-Dec	Advertising expense	$        1,200
	Cash		$        1,200
26-Dec	Accounts Payable	$           800
	Cash		$           800
28-Dec	Utilities expense	$           320
	Utilities Payable		$           320
31-Dec	Cash	$     17,000
	Accounts Receivable	$        3,800
	Service Revenue		$     20,800
31-Dec	Salaries expense	$        3,700
	Rent expense	$        1,300
	Cash		$        5,000
31-Dec	Cash	$        1,260
	Unearned Revenue		$        1,260
31-Dec	Withdrawals	$        6,000
	Cash		$        6,000

Smith Quality Automotive T Accounts Date Date Date Office Supplies Date Credit Debit Debit Credit Debit Credit Debit Credit Date Date Date Date Cash Accounts Receivable Prepaid Insurance 1-Dec $75,000 1-Dec $14,000 1-Dec $ 2,100 31-Dec 3,800 10-Dec 2,600 1-Dec 2,100 19-Dec $30,000 31-Dec $17,000 9-Dec $ 21,000 22-Dec $ 1,200 31-Dec $ 1,260 26-Dec $ 800 31-Dec 5,000 31-Dec $6,000 $ 2,600 $ 2,100 $ 3,800 $73,160 Bal. Bal. Bal. Bal. Land Equipment 9-Dec $21,000 1-Dec $14,000 $21,000 $14,000 Bal. Bal. Accounts Payable Unearned Revenue Notes Payable Utilties Payable 28-Dec $ 31-Dec $1,260 26-Dec $ 19-Dec $30,000 10-Dec $ 2.600 800 320 Bal. Bal. Bal $ 1,800 $ $ 1,260 $30,000 Bal 320 Capital Withdrawals 1-Dec $75,000 31-Dec $6,000 Bal. $ 6,000 $75,000 Bal. Service revenue Salary expense Utilites expense Rent expense 31-Dec $20,800 31-Dec $ 3,700 31-Dec $ 1,300 28-Dec $ 320 Bal. 3,700 $20,800 Bal. $1,300 $ Bal. Bal. 320 Advertising expense 22-Dec $ 1,200 $ 1,200 Bal.

Smith Quality Automotive	Unadjusted TB
Account Names	Debit	Credit
Cash	73,160
Accounts Receivable	3,800
Office Supplies	2,600
Prepaid Insurance	2,100
Land	21,000
Equipment	14,000
Accounts Payable		1,800
Utilities Payable		320
Unearned Revenue		1,260
Notes Payable		30,000
Capital		75,000
Withdrawals	6,000
Service Revenue		20,800
Salaries expense	3,700
Rent expense	1,300
Utilities expense	320
Advertising expense	1,200
Totals	129,180	129,180