Question

On October 1, 2018, 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, 2018. 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 $49,000 cash, a $21,000 computer system, and $8,000 of office equipment in the company in exchange for its common stock.
		2		The company paid $3,300 cash for four months' rent. (Hint: Debit Prepaid Rent for $3,300.)
		3		The company purchased $1,420 of computer supplies on credit from Harris Office Products.
		5		The company paid $1,680 cash for one year's premium on a property and liability insurance policy. (Hint: Debit Prepaid Insurance for $1,680.)
		6		The company billed Easy Leasing $5,100 for services performed in installing a new web server.
		8		The company paid $1,420 cash for the computer supplies purchased from Harris Office Products on October 3.
		10		The company hired Lyn Addie as a part-time assistant for $115 per day, as needed.
		12		The company billed Easy Leasing another $1,500 for services performed.
		15		The company received $5,100 cash from Easy Leasing as partial payment on its account.
		17		The company paid $790 cash to repair computer equipment that was damaged when moving it.
		20		The company paid $1,688 cash for advertisements published in the local newspaper.
		22		The company received $1,500 cash from Easy Leasing on its account.
		28		The company billed IFM Company $5,608 for services performed.
		31		The company paid $805 cash for Lyn Addie’s wages for seven days' work.
		31		The company paid $2,900 cash in dividends.
Nov.		1		The company reimbursed S. Rey in cash for business automobile mileage allowance (Rey logged 1,000 miles at $0.24 per mile).
		2		The company received $4,733 cash from Liu Corporation for computer services performed.
		5		The company purchased computer supplies for $1,035 cash from Harris Office Products.
		8		The company billed Gomez Co. $6,268 for services performed.
		13		The company received notification from Alex’s Engineering Co. that Business Solutions’s bid of $4,850 for an upcoming project was accepted.
		18		The company received $2,308 cash from IFM Company as partial payment of the October 28 bill.
		22		The company donated $190 cash to the United Way in the company's name.
		24		The company completed work and sent a bill for $4,850 to Alex’s Engineering Co.
		25		The company sent another bill to IFM Company for the past-due amount of $3,300.
		28		The company reimbursed S. Rey in cash for business automobile mileage (1,200 miles at $0.24 per mile).
		30		The company paid $1,610 cash for Lyn Addie's wages for 14 days' work.
		30		The company paid $1,900 cash in dividends.

Required:

1. Prepare journal entries to record each of the above transactions for Business Solutions.
2. Post journal entries from requirement 1 to the general ledger accounts.
3. Prepare a trial balance as of the end of November.

Answer 1

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understand the answer  beginning from journal entries, then cash a/c and then common stock a/c. dividend has been directly paid from common stock a/c assuming that entire profit was also transferred to common stock a/c.