Question

The general ledger of Jackrabbit Rentals at January 1, 2021, includes the following account balances:

Accounts	Debits				Credits
Cash	$	46,500
Accounts Receivable		30,700
Land		115,800
Accounts Payable						15,800
Notes Payable (due in 2 years)						35,000
Common Stock						105,000
Retained Earnings						37,200
Totals	$	193,000			$	193,000

The following is a summary of the transactions for the year:

1.		January		12		Provide services to customers on account, $67,400.
2.		February		25		Provide services to customers for cash, $77,800.
3.		March		19		Collect on accounts receivable, $46,200.
4.		April		30		Issue shares of common stock in exchange for $35,000 cash.
5.		June		16		Purchase supplies on account, $13,100.
6.		July		7		Pay on accounts payable, $11,800.
7.		September		30		Pay salaries for employee work in the current year, $69,200.
8.		November		22		Pay advertising for the current year, $23,000.
9.		December		30		Pay $3,400 cash dividends to stockholders.

The following information is available for the adjusting entries.

Accrued interest on the notes payable at year-end amounted to $3,000 and will be paid January 1, 2022. Accrued salaries at year-end amounted to $2,000 and will be paid on January 5, 2022. Supplies remaining on hand at the end of the year equal $2,800.

1. Record each of the transactions listed above in the 'General Journal' tab (these are shown as items 1 - 9). Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances.

2. Record the adjusting entries in the 'General Journal' tab (these are shown as items 10-12).

3. Review the adjusted 'Trial Balance' as of December 31, 2021.

4. Prepare an income statement for the period ended December 31, 2021, in the 'Income Statement' tab.

5. Prepare a classified balance sheet as of December 31, 2021 in the 'Balance Sheet' tab.

6. Record the closing entries in the 'General Journal' tab (these are shown as items 13-15).

Answer 1

1.

Item	Date	General Journal	Debit	Credit
1	January 12	Accounts receivable	67400
		Service revenue		67400
		(To record services provided on account)
2	February 25	Cash	77800
		Service revenue		77800
		(To record services provided for cash)
3	March 19	Cash	46200
		Accounts receivable		46200
		(To record collections on account)
4	April 30	Cash	35000
		Common stock		35000
		(To record the issuance of common stock)
5	June 16	Supplies	13100
		Accounts payable		13100
		(To record supplies purchased on account)
6	July 7	Accounts payable	11800
		Cash		11800
		(To record payment on account)
7	September 30	Salaries expense	69200
		Cash		69200
		(To record salaries paid)
8	November 22	Advertising expense	23000
		Cash		23000
		(To record advertising expense paid)
9	December 30	Dividends/Retained earnings	3400
		Cash		3400
		(To record cash dividends paid)

Note: Kindly use appropriate account titles per the general ledger accounts provided.

Once the transactions are recorded in the 'General Journal" tab, the 'General Ledger' and the 'Trial Balance' tabs will get updated.

Then record the following adjusting entries in the 'General Journal' tab.

2.

Item	Date	General Journal	Debit	Credit
10	December 31	Interest expense	3000
		Interest payable		3000
		(To record interest accured on notes payable)
11	December 31	Salaries expense	2000
		Salaries payable		2000
		(To record accrued salaries)
12	December 31	Supplies expense ($13100 - $2800)	10300
		Supplies		10300
		(To record supplies expense)

Note: Kindly use appropriate account titles per the general ledger accounts provided.

Once the adjusting entries are recorded in the 'General Journal" tab, the adjusted 'Trial Balance' will get updated. This adjusted trial balance is required for completing the remaining parts. Kindly post the adjusted trial balance and the remaining requirements as a separate question.