Question

Required information C4-6 Recording/Posting Transactions and Adjustments, and Preparing Trial Balances and Financial Statements-Requires Calculating Depreciation and Interest (Chapters 2, 3, and 4) [LO 2-3, LO 3-3, LO 4- 2. LO 4-4) Fast Deliveries, Inc. (FDI), was organized in December last year and had limited activity last year. The resulting balance sheet at the beginning of the current year is provided below. Assets: Cash Accounts Receivable Supplies $12,600 600 720 FAST DELIVERIES, INC. Balance Sheet at January 1 Liabilities: Accounts Payable Stockholders' Equity: Common Stock Retained Earnings Total Liabilities and Stockholders' Equity $ 789 Total Assets $13,920 11,909 1,320 $13,92e Two employees have been hired at a monthly salary of $2.960 each. The following transactions occurred during January of the current year Ch. January 02 3 $6,000 is paid for 12 months insurance starting January 1. (Record as an asset.) $4,800 is paid for 12 months of ment beginning January 1. Record as an asset.) FDI borrow 530,00 cash from State Bank at 5% annual interest: this note is payable 2

Answer 1

JOURNAL on 31 JAN
Date	Particulars	Debit	Credit
31-Jan	Utility expense	1100
	Utility expense payable		1100
	(being expense recorded)
31-Jan	Supplies expense	1120
	Supplies		1120
	(being expense recorded)
31-Jan	Deferred revenue	2220
	Service revenue		2220
	(Being revenue recorded)
31-Jan	Interest expense	125
	Interest payable		125
	(30000*0.05/12)
31-Jan	Depreciation expense	600
	Accumulated depreciation	600
	(28800/4/12)
31-Jan	Salaries expense	2960
	Salaries payable		2960
	(being expense recorded)