Question

3. Meganco stared business on 1/1/XX as a sole proprietorship. During the first month the following transactions took place: 1/1 Megan invested $75,000 in cash into the business. 1/2 Office space was rented on a month to month basis. The first months rent of $1,200 was paid to the landlord. 1/3 Meganco purchased a new Mac, computer system for $7,500. The company put $2,000 cash down on the computer system and borrowed the balance on a 120 day 10% loan from the bank. 1/6 Accounting fees of $600 were paid in cash when the invoice was received. Meganco purchased a one year fire insurance policy and paid $6,000 in cash for it. 1/14 An invoice was received for the installation of the computer system in the amount of $150. This amount was for professional service and will be paid at the end of the month. 1/20 Meganco paid the owners utility bill in the amount of $75. 1/22 Meganco billed a customer for services in the amount of $3,000. 1/25 Meganco received a bill from the utility company for $300. 1/11 Required: From the above information, make all the necessary journal entries for the month of January. Omit the journal description.

Answer 1

Date	Account Title & Explanations	Debit($)	Credit($)
1-Jan	Cash	75,000
	Owner's capital		75,000
2-Jan	Rent expense	1,200
	Cash		1,200
3-Jan	Computer system	7,500
	Cash		2,000
	Notes payable		5,500
6-Jan	Accounting expenses	600
	Cash		600
11-Jan	Prepaid Insurance	6,000
	Cash		6,000
14-Jan	Professional service expense	150
	Accounts payable		150
20-Jan	Owner's Drawings	75
	Cash		75
22-Jan	Accounts receivable	3,000
	Service Revenue		3,000
25-Jan	Utilities expense	300
	Accounts payable		300