Question

Problem 2-1A Preparing and posting journal entries; preparing a trial balance LO C3, C4, A1, P1, P2

Karla Tanner opens a Web consulting business called Linkworks and completes the following transactions in its first month of operations.

April 1 Tanner invested $ 100,000 cash along with office equipment valued at $ 24,000 n the company in exchange for common stock.

2. The company prepaid $ 7,200 cash for 12 months" rent for office space. (Hint: Debit Prepaid Rent for $ 7,200 .)

3 The company made credit purchases for $ 12,000 in office equipment and $ 2,400 in office supplies. Payment is due within 10 days.

6 The company completed services for a client and immediately received $ 2,000 cash.

9 The company completed a $ 8,000 project for a client, who must pay within 30 days.

13 The company paid $ 14,400 cash to settle the account payable created on April 3.

19 The company paid $ 6,000 cash for the premium on a 12 -month insurance policy. (Hint: Debit Prepaid Insurance) for $ 6,000 .)

22 The company received $ 6,400 cash as partial payment for the work completed on April 9.

25 The company completed work for another client for $ 2,640 on credit.

28 The company paid $ 6,200 cash in dividends.

29 The company purchased $ 800 of additional office supplies on credit.

30 The company paid $ 700 cash for this month's utility bill.

Required:

.1. Prepare general journal entries to record these transactions using the following titles: Cash (101): Accounts Receivable (106): Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable (201); Common Stock (307) Dividends (319); Services Revenue (403); and Utilities Expense (690). 

2. Post the journal entries from part 1 to the ledger accounts

3. Prepare a trial balance as of April 30.

Answer 1

Journal Entries Account Title and Explaination Post Date Debit Credit Ref. (S) (S) Cash Office Equipment $ 100,000.00 Apr.1 $ 24,000.00 $ Common Stock 124,000.00 (To record Cash and Office Equipment invested in exchange of Common Stock) Apr.2 Prepaid Rent 7,200.00 Cash 7,200.00 (To record Cash paid for 12 months rent) Office Equipment Office Supplies Aprг.3 $ 12,000.00 $ 2,400.00 Accounts Payable 14,400.00 (To record Office Equipment and Office Supplies purchased оn ассоunt) Cash Apr.6 2,000.00 Service Revenue $ 2,000.00 (To record Service provided for Cash)

Accounts Receivable $ Apr.9 8,000.00 Service Revenue $ 8,000.00 |(To record Service provided on account) Accounts Payable Apr. 13 14,400.00 $ Cash 14,400.00 (To record payment of payables) Apr.19 Prepaid Insurance $ 6,000.00 Cash 6,000.00 (To record 12 тonths insuranсe paid) Apr.22 Cash 6,400.00 Accounts Receivable 6,400.00 (To record partial collection ofreceivables) Apr.25 Accounts Receivable 2,640.00 Service Revenue $ 2,640.00 (Тo record Service provided on aсcount)

Apr.28 Dividends $ 6,200.00 Cash $ 6,200.00 |(To record Dividends paid) Apr.29 Office Supplies 800.00 Accounts Payable |(To record Office Supplies purchased on account) $ 800.00 Apr.30 Utilities Expense 700.00 Cash 700.00 (To record Utilities bill paid)