Question

On April 1, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company's first month April 1 Nozomi invested $48,000 cash and computer equipment worth $30,000 in the company in exchange for common stock 2 The company rented furnished office space by paying $2,2ee cash for the first month's (April) rent. 3 The company purchased $1,700 of office supplies for cash. 10 The company paid $3,000 cash for the premium on a 12-month insurance policy. Coverage begins on April 11. 14 The company paid $1,000 cash for two weeks' salaries earned by employees. 24 The company collected $13,500 cash for commissions earned. 28 The company paid $1,000 cash for two weeks' salaries earned by employees. 29 The company paid $550 cash for minor repairs to the company's computer. 30 The company paid $750 cash for this month's telephone bill. 30 The company paid $2,500 cash in dividends. The company's chart of accounts follows: 101 Cash 106 Accounts Receivable 124 Office Supplies 128 Prepaid Insurance 167 Computer Equipment 168 Accumulated Depreciation-Computer 209 Salaries Payable 307 Common Stock 318 Retained Earnings 319 Dividends 405 Commissions Earned 612 Depreciation Expense-Computer Equip. 622 Salaries Expense 637 Insurance Expense 640 Rent Expense 650 Office Supplies Expense 684 Repairs Expense 688 Telephone Expense 901 Income Summary Equip. Use the following information: a. Prepaid Insurance of $167 has expired this month b. At the end of the month, $400 of office supplies are still available c. This month's depreciation on the computer equipment is $400 d. Employees earned $370 of unpaid and unrecorded salaries as of month-end e. The company earned $2,000 of commissions that are not yet billed at month-end Required: 1.8 2. Prepare journal entries to record the transactions for April and post them to the ledger accounts in Requirement 6b The company records prepaid and unearned items in balance sheet accounts 3. Using account balances from Requirement 6b, prepare an unadjusted trial balance as of April 30 4. Journalize the adjusting entries for the month and prepare the adjusted trial balance statement for the month of April 30
journal entries

Answer 1

Journal entries to record all the transactions are as shown below:

Date Particulars Apr-01 Cash Computer equipment Common Stock (For cash and equipment invested) L.F Amount (S) Amount (S) 48,000 30,000 78,000 2.200 Apr-02 Rent Expense cash (for rent paid for april) 2.200 1,700 Apr-03 Office Supplies cash (For office supplies purchased) 1.700 3,000 Apr-10 Prepaid Insurance Cash (For insurance premium for 12 months paid in advance) 3.000 1.000 Apr-14 Salaries expense cash (for 2 weeks salaries paid) 1,000 13,500 Apr-24 Cash Commissions earned (For cash received for commissions earned) 13,500

1,000 Apr-28 Salaries expense cash (for 2 weeks salaries paid) 1,000 Apr-29 Repairs Expense cash (for cash paid for computer repair) Apr-30 Telephone expense cash (For cash paid for telephone expense) 2,500 Apr-30 Dividends cash (For cash paid for dividends) 2.500 Adjusting Entries: Apr-30 Insurance expense Prepaid Insurance (For Insurance for 30 days expired)

Apr-30 Supplies Expense Office Supplies (for office supplies expensed) 1300 Apr-30 Depreciation exp-Computer Equipment Accumulated dep-Computer Equipment (For equipment depreciated) 00 370 Apr-30 Salaries expense Salaries payable (For salaries earned) 370 2,000 Apr-30 Account Receivable Commission Earned (for commission earned but not billed) 2,000 Closing Entries Date Particulars L. Debit Credit 15,500 Apr-30 Commission earned Income summary (For income closing balances recorded) 15,500