Question

On October 1, 2018, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. Rey adopts the calendar year for reporting purposes and expects to prepare the company's first set of financial statements on December 31, 2018. The company's initial chart of accounts follows. No. No. 307 Account Cash Accounts Receivable Computer Supplies Prepaid Insurance Prepaid Rent Office Equipment Computer Equipment Accounts Payable Account 101 Common Stock 106 Dividends 126 Computer Services Revenue 128 Wages Expense 131 Advertising Expense 163 Mileage Expense 167 Miscellaneous Expenses 201 Repairs Expense-Computer 623 o un w wio 677 Oct. 1 s. Rey invested $49,000 cash, a $20,000 computer system, and $9,000 of office equipment in the company in exchange for its common stock. 2 The company paid $3,280 cash for four months' rent. (Hint: Debit Prepaid Rent for $3,280.) 3 The company purchased $1,360 of computer supplies on credit from Harris Office Products. 5 The company paid $2,100 cash for one year's premium on a property and liability insurance policy. (Hint: Debit Prepaid Insurance for $2,100.) 6 The company billed Easy Leasing $5,700 for services performed in installing an 8 The company paid $1,360 cash for the computer supplies purchased from Harris Office Products on October 3. 10 The company hired Lyn Addie as a part-time assistant for $135 per day, as needed. 12 The company billed Easy Leasing another $1,600 for services performed. 15 The company received $5,700 cash from Easy Leasing as partial payment on its account. 17 The company paid $790 cash to repair computer equipment that was damaged when moving it. 20 The company paid $1,708 cash for advertisements published in the local newspaper. 22 The company received $1,600 cash from Easy Leasing on its account. 28 The company billed IFM Company $6,108 for services performed. 31 The company paid $945 cash for Lyn Addie's wages for seven days' work. 31 The company paid $2,700 cash in dividends. 1 The company reimbursed s. Rey in cash for business automobile mileage allowance (Rey logged 1,000 miles at $0.24 per mile). 2 The company received $5,533 cash from Liu Corporation for computer services performed. 5 The company purchased computer supplies for $1,030 cash from Harris Office Products. 8 The company billed Gomez Co. $5,768 for services performed. 13 The company received notification from Alex's Engineering Co. that Business Solutions's bid of $4,250 for an upcoming project was accepted. 10 ml . -- --- ---- ---- A ---L - TOU A - - -- - - ---- - ---- - - - - - - - --- L 1

Answer 1

Journal Entries
No.	Account	Dr.	Cr.
1	Cash	$49,000
	Computer Equipment	$20,000
	Office Equipment	$9,000
	Common Stock		$78,000
2	Prepaid Rent	$3,280
	Cash		$3,280
3	Computer Supplies	$1,360
	Accounts Payable		$1,360
4	Prepaid Insurance	$2,100
	Cash		$2,100
5	Accounts Receivable	$5,700
	Computer Services Revenue		$5,700
6	Accounts Payable	$1,360
	Cash		$1,360
7	No Entry
8	Accounts Receivable	$1,600
	Computer Services Revenue		$1,600
9	Cash	$5,700
	Accounts Receivable		$5,700
10	Repairs Expense-Computer	$790
	Cash		$790
11	Advertising Expense	$1,708
	Cash		$1,708
12	Cash	$1,600
	Accounts Receivable		$1,600
13	Accounts Receivable	$6,108
	Computer Services Revenue		$6,108
14	Wages Expense	$945
	Cash		$945
15	Dividends	$2,700
	Cash		$2,700
16	Mileage expense	$240		=1000*0.24
	Cash		$240
17	Cash	$5,533
	Computer Services Revenue		$5,533
18	Computer Supplies	$1,030
	Cash		$1,030
19	Accounts Receivable	$5,768
	Computer Services Revenue		$5,768
20	No Entry
21	Cash	$2,208
	Accounts Receivable		$2,208
22	Miscellaneous Expenses	$190
	Cash		$190
23	Accounts Receivable	$4,250
	Computer Services Revenue		$4,250
24	No Entry
25	Mileage expense	$240		=1000*0.24
	Cash		$240
26	Wages Expense	$1,890
	Cash		$1,890
27	Dividends	$1,800
	Cash		$1,800