Question

E1-8 the following items and amounts were taken from Lonyear

You have been hired as an accountant for AugFig Consulting Inc. This business was created when some friends decided to make use of their newly minted college degrees and go into business together. The business was created on January 1, 2019. The company will have a fiscal year end of December 31. The initial formation transactions and early purchases for AugFig Consulting Inc. resulted in the balances that are included in the first 2 columns of the Worksheet (see the worksheet tab) Amount Amount 6,850 11.760 During January, the first month of operations, the following transactions occurred: Date Event 1-Jan Purchased additional office supplies on account. 3-Jan Received cash in advance from Stanley Inc. for work to be performed over the next 12 months Borrowed cash from the bank for operating expenses. The note charges simple interest and is to be paid 4-Jan back in 5 years 8-Jan Paid for 12 months rent on office space 10-Jan Purchased office furniture. 14-Jan Paid for utilities 15-Jan Performed services for various customers for cash and on account 26-Jan Paid salaries to employees for 1 week. loan amt 0.03 interest rate 26,000 8,100 11,260 2,340 9,750 4,375 cash 18950 on account

Answer 1

Date	Particulars	Debit	Credit
Jan-01	Supplies	6850
	Accounts payable		6850
	( being supplies purchased)
Jan-03	Cash	11760
	Unearned revenue		11760
	( being advance received for work)
Jan-04	Cash	26000
	Long term notes payable		26000
	( being loan taken)
Jan-08	Prepaid rent	8100
	cash		8100
	( being rent paid in advance for 12 months)
Jan-10	furniture	11260
	Cash		11260
	( being furniture purchased)
Jan-14	Utilities	2340
	Cash		2340
	( being utilities purchased)
Jan-15	Cash	9750
	Accounts receivable	18950
	Service Revenue		28700
	( being revenue recognised)
26-Jan	Salary expense	4375
	Cash		4375
	( being salary paid)
28-Jan	Cash	16850
	Accounts receivable		16850
	( being cash received from customers)
29-Jan	accounts payable	8650
	cash		8650
	( being cash paid to accounts payable)
31-Jan	Dividend	2000
	Cash		2000
	( being dividend paid)

	Beginning numbers		January entries		Unadjusted balance
	Debit	Credit	Debit	Credit	Debit	Credit
Cash	49200		64360	36725	76835
Accounts receivable			18950	16850	2100
supplies	8650		6850		15500
prepaid rent			8100		8100
land	28000				28000
computer equipment	42800				42800
accumulated depreciation , comp eqp
office furniture			11260		11260
accumulated depreciation , off fur
accounts payable		8650	8650	6850		6850
salaries payable
interest payable
unearned revenue				11760		11760
long term notes payable				26000		26000
common stock		120000				120000
retained earnings
dividends			2000		2000
service revenue				28700		28700
salaries expense			4375		4375
rent espense
supplies expense
utilities expense			2340		2340
interest expense
Depreciation expense, comp equip
Depreciation expense, office furniture