Question

Record the journal entries in order as presented in the problem.

At June 30, 2018, the end of its most recent fiscal year, River Consultants Ltd. 's post-closing trial balance was as follows: Debit Credit Cash Accounts receivable Supplies Accounts payable Income tax payable Unearned revenue Common shares Retained earnings $15,700 1,300 700 $300 400 1,000 3,400 12,600 $17,700 $17,700 The company underwent a major expansion in July. New staff was hired and more financing was obtained. River conducted the following transactions during July 2018 July 3 Issued $11,000 of common shares for cash. 4 Purchased insurance coverage for a year, $3,960 5 Paid the first two (July and August 2018) months' rent for an annual lease of office space for $3,700 per month. (Hint: Use the Prepaid Rent account.) 6 Purchased $3,800 of supplies for cash. 6 Purchased equipment, paying $4,400 cash and signing a two-year bank loan for $19,600. The equipment has a four-year useful life. The bank loan has a 6% interest rate, which is payable on the first day of each following month 10 Visited client offices and agreed on the terms of a consulting project. River will invoice the client, Connor Productions Ltd., on the 19th of each month for work performed. 12 Collected $1,300 on account from Milani Brothers Ltd. This client was invoiced in June when the service was provided 13 Completed services for Mactaquac Inc. This client paid $1,000 in advance last month. All services relating to this payment are now completed. (Hint: Use the Fees Earned account.) 16 Paid salaries for the first half of the month, $11,100 17 Paid a utility bill of $300. This related to June utilities that were accrued at the end of June 18 Met with a new client, Bay Technologies. Received $11,600 cash in advance for future work to be performed 19 Invoiced Connor Productions for $27,500 of consulting fees provided on account. (Hint: Use the Fees Earned account.) 20 Received an invoice for legal advice, $2,000. The amount is not due until August 20. (Hint: Use the Professional Fees Expense account.) 23 Completed the first phase of the project for Bay Technologies Ltd. Recognized $10,100 of revenue from the cash advance previously received (see July 18 transaction) 25 Paid $400 income tax payable owing at the end of June, in addition to $1,000 for the July income tax instalment. 27 Received $15,700 cash from Connor Productions in partial payment of the invoice issued on July 19 30 Declared and paid a $5,000 dividend.

Answer 1

Date	Account Titles and Explanation	Debit	Credit
Jul-03	Cash	11000
	Common shares		11000
	(Issue of common shares for cash)
Jul-04	Prepaid insurance	3960
	Cash		3960
	(Purchase of insurance for a year)
Jul-05	Prepaid rent ($3700 x 2)	7400
	Cash		7400
	(Rent paid for two months)
Jul-06	Supplies	3800
	Cash		3800
	(Purchase of supplies for cash)
Jul-06	Equipment	24000
	Cash		4400
	Notes payable		19600
	(Purchase of equipment)
Jul-10	No journal entry required
Jul-12	Cash	1300
	Accounts receivable		1300
	(Collection on account)
Jul-13	Unearned revenue	1000
	Fees earned		1000
	(Fees earned for services)
Jul-16	Salaries expense	11100
	Cash		11100
	(Salaries paid)
Jul-17	Accounts payable	300
	Cash		300
	(Utilities bill for June paid)
Jul-18	Cash	11600
	Unearned revenue		11600
	(Collection in advance)
Jul-19	Accounts receivable	27500
	Fees earned		27500
	(Services provided on account)
Jul-20	Professional fees expense	2000
	Accounts payable		2000
	(Invoice for legal advice recorded)
Jul-23	Unearned revenue	10100
	Fees earned		10100
	(Fees earned for services)
Jul-25	Income tax payable	400
	Income tax expense	1000
	Cash		1400
	(Income taxes paid)
Jul-27	Cash	15700
	Accounts receivable		15700
	(Collection on account)
Jul-30	Dividends	5000
	Cash		5000
	(Declaration and payment of dividends)