Question

January 1 The owners invested $130,000 in exchange for common stock. 1. The company borrowed $15,000 from a local bank with a 6% note and a six-month term. Both the principal and interest will be repaid in six months. 1 The company purchased computer equipment for $16,800 cash. It should last seven years, with no residual value. 6 Supplies were purchased on account for $1,500. 8 Office rent of $600 for January was paid in cash. 20 The company received $3,000 from a customer for services to be performed in February. 31 Consulting services performed during January on account totaled $10,500. 31 The company paid salaries of $5,500 to employees. 31 The company paid $1,000 to the supplies vendor as part of the $1,500 owed to the vendor from the purchase on January 6. The company only paid part of the invoice because it only used $1,000 worth of the supplies in January.

Answer 1

Ref.	Date	Accounts and Explanation	Debit	Credit
1-1	Jan 1	Cash	$130,000
		Common Stock		$130,000
1-2	Jan 1	Cash	$15,000
		Note Payable		$15,000
1-3	Jan 1	Equipment	$16,800
		Cash		$16,800
1-4	Jan 6	Supplies	$1,500
		Accounts Payable		$1,500
1-5	Jan 8	Rent Expense	$600
		Cash		$600
1-6	Jan 20	Cash	$3,000
		Unearned Service Revenue		$3,000
1-7	Jan 31	Accounts Receivable	$10,500
		Service Revenue		$10,500
1-8	Jan 31	Salaries Expenses	$5,500
		Cash		$5,500
1-9	Jan 31	Accounts Payable	$1,000
		Cash		$1,000
Adjusting Entries
A-1	Jan 31	Supplies Expense	$0
		Supplies		$0
A-2	Jan 31	Interest Expense ($15,000 x 6% x 1/12)	$75
		Interest Payable		$75
A-3	Jan 31	Depreciation Expense ($16,800/7 Years x 1/12)	$200
		Accumulated Depreciation		$200