Question

Record the following journal entries and post to the T-accounts for ABC Company for the month of January:

1. On 1/1, Common stock was issued for $50,000.
2. On 1/3, ABC signed a 6% (.5% per month) note at State Bank for $75,000.
3. On 1/4, ABC purchased computer equipment for $81,500.
4. On 1/6, ABC purchased office supplies on account for $2,850.
5. On 1/7, ABC purchased prepaid insurance for $4,800 and paid rent of $1,800.
6. On 1/10, ABC paid salaries of $950.
7. On 1/15, ABC provided computer consulting services for a client and received $ 3,450 in cash.
8. On 1/20, ABC provided computer consulting services for a client that promised to pay $3,150 in 30 days.
9. On 1/21, ABC paid for half of the office supplies purchased on 1/6.
10. On 1/24, ABC paid salaries of $1,235.
11. On 1/26, ABC collected a partial payment of $1,100 from the client from 1/20.
12. On 1/29, ABC paid for $75 cleaning services.

Prepare the trial balance, and make the following adjustments:
1. Recognize one month of insurance expense (one twelfth), interest expense (note times .5%), and depreciation on equipment (5-year asset, divide the cost by 60 for one month).
2. Accrue for salaries expense and utilities expense of $695 and $286, respectively.
3. Supplies on hand were $1,305 (subtract 1,305 from the original balance to get the cost of supplies used).

Accounts recalvable Prepaid Insurance Supplies Inventory Trial balance Trial balance Debits Credits Adjusting entries Debits Credits Adjusted trial balance Debits Credits 1 Accounts payable Notes payable Common stock Accounts Cash Accounts receivable Prepaid insurance Supplies inventory Computer equipment Accumulated depreciation Accounts payable Notes payable Common stock Revenue Cleaning expense Depreciation expense Insurance expense Interest expense Rent expense Salaries expense Supplies expense Utilities expense Cleaning expense Rent expense Salaries expense - S - $ - $ - $ $ Prepare the adjusted trial balance by making the the following adjustments (use AP for all payables): 1. Recognize one month of insurance expense, interest expense, and depreciation on equipment (5-year asset) 2. Accrue for salaries expense and utilities expense of $695 and $286, respectively 3. Supplies on hand were $1,305 ies and post to the T-accounts for ABC Company for the month of January: n stock was issued for $50,000. gned a 6% note (,5% per month) at State Bank for $75,000. rchased computer equipment for $81,500. rchased office supplies on account for $2,850. rchased prepaid insurance for $4.800 and paid rent of $1,800. aid salaries of $950. rovided computer consulting services for a client and received $ 3,450 in cash. rovided computer consulting services for a client that promised to pay $3,150 in 30 days. aid for half of the office supplies purchased on 1/6. ald salaries of $1,235. ollected a partial payment of $1,100 from the client from 1/20. ald for $75 cleaning services,

Answer 1

	REF	DATE	ACCOUNT TITLES	DEBIT	CREDIT
	1	.1/1	Cash	$50,000
			Common Stock		$50,000
	2	.1/3	Cash	$75,000
			Note Payable		$75,000
	3	.1/4	Computer Equipment	$81,500
			Cash		$81,500
	4	.1/6	Office Supllies	$2,850
			Accounts Payable		$2,850
	5	.1/7	Prepaid Insurance	$4,800
			Rent Expense	$1,800
			Cash		$6,600
	6	.1/10	Salaries expense	$950
			Cash		$950
	7	.1/15	Cash	$3,450
			Service Revenue		$3,450
	8	.1/20	Accounts Receivable	$3,150
			Service Revenue		$3,150
	9	.1/21	Accounts Payable	$1,425
			Cash		$1,425
	10	.1/24	Salaries expense	$1,235
			Cash		$1,235
	11	.1/26	Cash	$1,100
			Accounts Receivable		$1,100
	12	.1/29	Cleaning expense	$75
			Cash		$75
							REF CREDIT DEBIT $50,000 $75,000 DATE 1.1/1 2.1/3 3.1/4 5.1/7 6.1/10 7.1/15 9.1/21 10 .1/24 11 .1/26 12.1/29 T-ACCOUNTS CASH DESCRIPTION Common stock Note Payable Computer Equipment Prepaid Insurance and Rent Salaries expense Service revenue Accounts Payable Salaries expense Accounts Receivable Cleaning expense Balance $81,500 $6,600 $950 $3,450 $1,425 $1,235 $1,100 $75 $37,765 REF CREDIT DATE 8.1/20 11 .1/26 ACCOUNTS RECEIVABLE DESCRIPTION Service Revenue Cash Balance DEBIT $3,150 $1,100 $2,050 REF PREPAID INSURANCE DESCRIPTION Cash DATE 5.1/7 CREDIT DEBIT $4,800 REF RENT EXPENSE DESCRIPTION Cash DATE 5.1/7 CREDIT DEBIT $1,800 REF COMPUTER EQUIPMENT DESCRIPTION Cash DATE 3.1/4 CREDIT DEBIT $81,500 REF OFFICE SUPPLIES DESCRIPTION Accounts Payable DATE 4.1/6 CREDIT DEBIT $2,850 REF DEBIT DATE 4.1/6 9.1/21 ACCOUNTS PAYABLE DESCRIPTION Office Supllies Cash Balance CREDIT $2,850 $1,425 $1,425 REF NOTE PAYABLE DESCRIPTION Cash DATE 2.1/3 DEBIT CREDIT $75,000 REF COMMON STOCK DESCRIPTION Cash DATE 1.1/1 DEBIT CREDIT $50,000 REF COMMON STOCK DESCRIPTION Cash DATE 1.1/1 DEBIT CREDIT $50,000 REF DEBIT DATE 7.1/15 8.1/20 SERVICE REVENUE DESCRIPTION Cash Accounts Receivable Balance CREDIT $3,450 $3,150 $6,600 REF CREDIT DATE 6.1/10 10 .1/24 SALARIES EXPENSE DESCRIPTION Cash Cash Balance CLEANING EXPENSE DESCRIPTION Cash DEBIT $950 $1,235 $2,185 REF CREDIT DATE 12 .1/29 DEBIT $75 CREDIT TRIAL BALANCE ACCOUNT CASH ACCOUNTS RECEIVABLE PREPAID INSURANCE RENT EXPENSE COMPUTER EQUIPMENT OFFICE SUPPLIES ACCOUNTS PAYABLE NOTE PAYABLE COMMON STOCK SERVICE REVENUE SALARIES EXPENSE CLEANING EXPENSE TOTAL DEBIT $37,765 $2,050 $4,800 $1,800 $81,500 $2,850 $1,425 $75,000 $50,000 $6,600 $2,185 $75 $133,025 $133,025