Question

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

Accounts	Debits				Credits
Cash	$	51,500
Accounts Receivable		35,700
Land		120,800
Accounts Payable						16,300
Notes Payable (due in 2 years)						40,000
Common Stock						110,000
Retained Earnings						41,700
Totals	$	208,000			$	208,000

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

1.		January		12		Provide services to customers on account, $72,400.
2.		February		25		Provide services to customers for cash, $80,300.
3.		March		19		Collect on accounts receivable, $46,700.
4.		April		30		Issue shares of common stock in exchange for $40,000 cash.
5.		June		16		Purchase supplies on account, $14,100.
6.		July		7		Pay on accounts payable, $12,300.
7.		September		30		Pay salaries for employee work in the current year, $74,200.
8.		November		22		Pay advertising for the current year, $23,500.
9.		December		30		Pay $3,900 cash dividends to stockholders.

The following information is available for the adjusting entries.

Accrued interest on the notes payable at year-end amounted to $3,500 and will be paid January 1, 2022. Accrued salaries at year-end amounted to $2,500 and will be paid on January 5, 2022. Supplies remaining on hand at the end of the year equal $3,300.

1. 3. 6. & 10. Post the transactions, adjusting entries and closing entries to the T-accounts. Be sure to include beginning balances.

Answer 1

According to the requirement of the question, we have to record General journal, adjusting entries and Closing entries

Requirement 1:- General Journal

Date	Accounts Titles and Explanation	Debit ($)	Credit ($)
Jan. 12, 2021	Account Receivable	$72,400
	Service Revenue		$72,400
	(Services provided on Account)
Feb. 25, 2021	Cash	$80,300
	Service Revenue		$80,300
	(Services provided on Cash)
Mar. 19, 2021	Cash	$46,700
	Account Receivable		$46,700
	(Cash Collected)
Apr. 30, 2021	Cash	$40,000
	Common Stock		$40,000
	(Common stock issued for Cash)
June 16, 2021	Supplies	$14,100
	Account Payable		$14,100
	(Supplies purchased on Account)
July 7, 2021	Account Payable	$12,300
	Cash		$12,300
	(Cash paid to Suppliers)
Sep. 30, 2021	Salaries	$74,200
	Cash		$74,200
	(Salaries paid to employees)
Nov. 22, 2021	Advertisement Expense	$23,500
	Cash		$23,500
	(Advertisement Expenses paid)
Dec. 30, 2021	Dividend Expense	$3,900
	Cash		$3,900
	(Cash Dividend paid to Stockholders)

Requirement 2:- Adjustment Entries

Solution:- Journal entries in the books of Jackrabbit Rentals

Date	Account Titles and Explanations	Debit ($)	Credit ($)
Dec. 31, 2021	Interest on Notes Payable	$3,500
	Interest Payable		$3,500
	(Interest accrued on Notes Payable)
Dec. 31, 2021	Salaries Expense	$2,500
	Salaries Payable		$2,500
	(Salaries Accrued)
Dec. 31, 2021	Supplies Expense ($14,100 - $3,300)	$10,800
	Supplies		$10,800
	(Supplies used during the year)

Requirement 3:- Closing Entries

Year	Account Titles and Explanations	Debit ($)	Credit ($)
2021	Service Revenue ($72,400 + $80,300)	$152,700
	Income Summary		$152,700
	(Revenue transferred to income statement)
2021	Income Summary	$114,500
	Interest Expense		$3,500
	Salaries Expense ($74,200 + $2,500)		$76,700
	Advertisement Expense		$23,500
	Supplies Expense		$10,800
	(Expenses transferred to income statement)
2021	Income Summary ($152,700 - $114,500)	$38,200
	Retained Earnings		$38,200
	(Excess of income over expense transferred to retained earnings account)
2021	Retained Earnings	$3,900
	Dividend Expense		$3,900
	(Cash dividend paid to stake holders)

                                      Trial balance

Adjusted Trial balance

December 31, 2021

Accounts	Debit ($)	Credit($)
Cash ($51,500 + $80,300 + $46,700 + $40,000 - $12,300 - $74,200 - $23,500 - $3,900)	$104,600
Account Receivable ($35,700 + $72,400 - $46,700)	$61,400
Supplies	$14,100
Land	$120,800
Account Payable {$16,300 + ($14,100 - $12,300)}		$18,100
Notes Payable		$40,000
Common Stock ($110,000 + $40,000)		$150,000
Retained Earnings		$41,700
Dividend	$3,900
Service Revenue		$152,700
Salaries Expense	$74,200
Advertisement Expense	$23,500
Totals	$402,500	$402,500

Thank you.

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