Question

Problem 2-03A a-c (Part Level Submission) Bonita Services was formed on May 1, 2020. The following transactions took place during the first month. Transactions on May 1: 1. Jay Bradford invested $41,000 cash in the company, as its sole owner. 2. Hired two employees to work in the warehouse. They will each be paid a salary of $3,400 per month. 3. Signed a 2-year rental agreement on a warehouse; paid $24,000 cash in advance for the first year. 4. Purchased furniture and equipment costing $33,500. A cash payment of $12,000 was made immediately; the remainder will be paid in 6 months. 5. Paid $1,900 cash for a one-year insurance policy on the furniture and equipment. Transactions during the remainder of the month: 6. Purchased basic office supplies for $600 cash. 7. Purchased more office supplies for $1,500 on account. 8. Total revenues earned were $21,500-$8,500 cash and $13,000 on account. 9. Paid $500 to suppliers for accounts payable due. 10. Received $3,200 from customers in payment of accounts receivable. 11. Received utility bills in the amount of $500, to be paid next month. 12. Paid the monthly salaries of the two employees, totaling $6,800.

Answer 1

Answer :-

No	Particulars	Debit	Credit
1.	Cash	41000
	Owner's Capital		41000
	(To record the investment in company)
2	No entry	0
	No entry		0
	(Being employee is hired not paid the salary)
3	Prepaid Rent	24000
	Cash		24000
	(To record rent paid in advance)
4	Equipment	33500
	Cash		12000
	Accounts Payable		21500
	(To record Purchase of equipment and cash payment of $12,000 )
5	Prepaid Insurance	1900
	Cash		1900
	(To record payment for insurance policy)
6	Supplies	600
	Cash		600
	(To record Purchase of office supplies in cash)
7	Supplies	1500
	Accounts Payable		1500
	(To record Purchase of office supplies on Account)
8	Account receivable	13000
	Cash	8500
	Service Revenues		21500
	(To record the revenue earned)
9	Accounts Payable	500
	Cash		500
	(To record payment to suppliers)
10	Cash	3200
	Account receivable		3200
	(To record payment received from customer)
11	Utilities Expenses	500
	Account payable		500
	(To record received of utility bill)
12	Salaries and wages Expense	6800
	To Cash		6800
	(To record payment of salaries to employees)

Posting of journal entries to T - Account

Cash
1	41000	3	24000
8	8500	4	12000
10	3200	5	1900
		6	600
		9	500
		12	6800
Bal	6900

.

Account Receivable
8	13000	10	3200
Bal	9800

.

Supplies
6	600
7	1500
Bal	2100

.

Prepaid Insurance
5	1900
Bal	1900

.

Prepaid Rent
3	24000
Bal	24000

.

Equipment
4	33500
Bal	33500

.

Account Payable
9	500	4	21500
		7	1500
		11	500
		Bal	23000

.

Owner Capital
		1	41000
		Bal	41000

.

Services Revenue
		8	21500
		Bal	21500

.

Salaries and wages Expense
12	6800
Bal	6800

.

Utilities Expense
11	500
Bal	500