Question

1-Dec Borrow $10,000 from the local bank and sign a note promising to repay the full amount of the debt in three years 1-Dec Pay one year of rent in advance, $6,000 ($500 per month) 6-Dec Purchase supplies on account, $2,300 17-Dec Provide soccer training to customers on account, $2,000 23-Dec Receive cash in advance for 12 soccer training sessions to be given in the future, $600 1. One month rent has expired 2. Physical cound of supplies reveals that only $1,300 of supplies remains 3. one month of the equipment's use has expired (depreciation expense $400) 4. $200 of services have been provided. Related to Dec. 23 advance payament 5. $300 in salaries have been earned by employees for the final three days of the month 6. utilities costs of $900 have been incurred but have not been paid , one month of interest has been charged for borrowing $10,000 at 12% interest (. $10,000 x 12X> 1/ 12) 8. services of $700 have been provided to customers but have not yet been billed

Answer 1

A	B	C	D	E	F	G	H	I
2
3		Journal entry of the transactions will be as follows:
4
5		Date	Accounts	Debit	Credit
6		1-Dec	Cash	10000
7			Notes Payable		10000
8			(Borrowed against notes payable)
9
10		1-Dec	Prepaid Rent	$6,000
11			Cash		$6,000
12			(Paid Rent in Advance)
13
14		6-Dec	Supplies	$2,300
15			Accounts Payable		$2,300
16
17		17-Dec	Accounts receivable	$2,000
18			Service Revenue		$2,000
19
20		23-Dec	Cash	$600
21			Unearned Service Revenue		$600
22			(For cash received in advance for future service)
23
24		Adjusting entries will be as follows:
25
26		No.	Accounts	Debit	Credit
27		1	Rent Expense	$500
28			Prepaid Rent		500
29			(One month rent expensed)
30
31		2	Supplies Expense (2300-1300)	$1,000
32			Supplies		$1,000
33
34		3	Depreciation Expense	$400
35			Accumulated Depreciation		$400
36
37		4	Unearned Service Revenue	$200
38			Service Revenue		$200
39
40		5	Wages Expense	$300
41			Wages Payable		$300
42
43		6	Utilities Expense	$900
44			Accounts Payable		$900
45
46		7	Interest Expense	$100		=10000*12%*(1/12)
47			Interest Payable		$100
48
49		8	Accounts Receivable	$700
50			Service revenue		$700
51			(Recording unbilled revenue)
52