Question

KFS was formed on November 1, 2014. During the month of November, the following transactions took place: Nov 1. The owner invested $35,000 cash in the company. He also invested equipment that had originally cost the owner $25,000 but the most recent market value estimate was $12,000. 2. Hired one employee to work in the office for a monthly salary of $2,825, 3. Signed a contract for office space. Also, paid the first and last month of the rental centract; $2,140 per month. 4. Purchased a one-year life insurance policy in the amount of $4,740 to be paid in monthly installments. Paid the first month's premium. 5. Purchased equipment for $18,000. Paid $6,000 in cash and signed a note payable for the difference. 6. Purchased on supplies on account, $1,550 7. Purchased addition supplies for cash, $475. 16. Completed services for a customer and immediately collected $990. 20. Completed services for two customers and billed them a total of $4,500. 26. Paid $1,000 for the supplies purchased on November 6. 27. The phone bill ($220) was received. It will be paid in December. 28. Received $750 cash advance from a customer for services to be provided in December 29. Collected $2,800 from one of the customers previously billed on Nov 20. 30. Paid $60 in interest on notes payable. 30. Paid the employee's monthly salary: $2,825. 30. The owner paid himself a salary of $700 30. Paid Bang & Olufsen for a sound system to be used in the owner's home; $1,150 cash. Assignment: 1. Prepare the journal entries to record transactions. 2. Post the journal entries to the ledger (T-account). 3. Prepare a trial balance as of November 30, 2014.

Answer 1

Journal Entries Post Account Title and Explaination Date Debit Credit Ref. S Cash 35,000.00 Nov.1 Equipment $ 12,000.00 Capital (To record Cash and Equipment invested into business) 47,000.00 No Journal Entry Required Nov.2 Rent Expense $ 2,140.00 Nov.3 Cash 2,140.00 (To record rent expense paid) Prepaid Insurance 4,740.00 S Nov.4 Cash $ 4,740.00 (To record one year insurance policy purchased) Еquipment 18,000.00 Nov.5 Cash $ 6,000.00 Notes Payable (To record Equipment purchased) $ 12,000.00

Nov.6 Supplies 1,550.00 Accounts Payable $ 1,550.00 (To record Supplies purchased on account) Nov.7 Supplies 475.00 Cash 475.00 (To record supplies purchased for cash) Nov.16 Cash 990.00 Service Revenue 990.00 (To record Service provided and cash received) Nov.20 Accounts Receivable $ 4,500.00 Service Revenue $ 4,500.00 (Тo record Service provided on aсcount) Nov.26 Accounts Payable 1,000.00 Cash $ 1,000.00 (To record payment of payables) Nov.27 Telephone Expenses $ 220.00 Telephone Expenses payable (To record telephone expenses payable) 220.00

Nov.28 Cash 750.00 Unearned Service Revenue $ 750.00 (To record cash received as advance) Cash Nov.29 2,800.00 Accounts Receivable 2,800.00 |(To record collection of receivables) Interest Expense Nov.30 $ 60.00 Cash 60.00 (To record interest on notes paid) Nov.30 Salaries Expense $ 2,825.00 Cash 2,825.00 (To record Salaries Expenses paid) Nov.30 Salaries Expense 700.00 Cash 700.00 (To record Salaries paid) Nov.30 Owner's Withdrawals 1,150.00 Cash 1,150.00 (To record cash usedfor personal use) A