Question

Exercise 4-7 (Part Level Submission) The CCBC Corporation had the following opening trial balance at the beginning of its fiscal year, July 1, 2018: Credit Debit $ 5,150 6,650 1,150 15,600 Cash Accounts receivable Supplies Equipment Accumulated depreciation equipment Unearned revenue Common shares Retained earnings Totals $ 5,000 2,500 6,000 15,050 $ 28,550 $ 28,550 During the month of July, the following selected transactions took place: July 2 Paid $1,000 for two months' rent in advance for July and August. 7 Purchased $220 of supplies on account. 14 Collected half of outstanding accounts receivable. 15 Borrowed $1,000 from the bank for one year at an interest rate of 5%. 21 Received $1,000 cash from a customer for services to be performed in August. 28 Performed $1,000 of services to a customer on account. Additional information: 1. At July 31, the company had performed $800 of services for a client that it had not billed or recorded. Refer to the July 2 transaction where rent was paid in advance and adjust, if required. 3. Supplies on hand at July 31 were $500. 4. The equipment has a five-year useful life and uses straight-line depreciation. 5. Interest is due on the bank loan on the first day of each following month, beginning August 1. 6. As at July 31, the company owed $2,500 of salaries to its employees for the month just ended. 7. As at July 31, the company had earned $2,000 of revenue that had been paid in advance.

Part a: Record the July transactions. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Answer 1

Journal Entries:

Date	Account title and Explanation	Debit	Credit
July 2	Prepaid rent	$1,000
	Cash		$1,000
	[To record rent paid in advance]
July 7	Supplies	$220
	Accounts payable		$220
	[To record purchase of supplies on account]
July 14	Cash [6,650 x 1/2]	$3,325
	Accounts receivable		$3,325
	[To record collections from customers]
July 15	Cash	$1,000
	Notes payable		$1,000
	[To record cash borrowed from bank]
July 21	Cash	$1,000
	Unearned service revenue		$1,000
	[To record cash received in advance from customers]
July 28	Accounts receivable	$1,000
	Service revenue		$1,000
	[To record services performed on account]
Adjusting entries:
July 31	Accounts receivable	$800
	Service revenue		$800
	[To record accrued service revenue]
July 31	Rent expense [1,000 x 1/2]	$500
	Prepaid rent		$500
	[To record rent expense]
July 31	Supplies expense [1,150 - 500]	$650
	Supplies		$650
	[To record supplies expense]
July 31	Depreciation expense [(15,600/5) x 1/12]	$260
	Accumulated depreciation-equipment		$260
	[To record depreciation expense]
July 31	Interest expense [1,000 x 5% x 0.5/12]	$2.08
	Interest payable		$2.08
	[To record accrued interest expense]
July 31	Salaries expense	$2,500
	Salaries payable		$2,500
	[To record accrued salaries expense]
July 31	Unearned service revenue	$2,000
	Service revenue		$2,000
	[To record revenue earned from unearned]