Question

On January 1, 2018, Dakota, Inc., had the following account balances in its general ledger. All accounts have a "normal" type of balance, i.e., a debitor credit balance, depending on the type of acc Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accumulated Depreciation Accounts Payable Interest Payable Utilities Payable Unearned Revenue Notes Payable Owner Capital Withdrawals Service Revenue Rent Expense Salaries Expense Insurance Expense Supplies Expense Utilities Expense Depreciation Expense Interest Expense $255,000 160,000 60,000 0 550,000 320,000 80,000 0 0 60,000 0 565,000 0 0 0 0 0 0 0 0 0 January Transactions: Amount January 1 Borrowed on a 18-month. 4% note. All principal and interest due at matu $ 195,000 January 2 Purchased equipment on account. 25,000 January 4 Paid cash for January rent of the building. 2.250 January 5 Received cash from customers in payment of accounts receivable. 64,000 January 9 Paid cash for a one-year insurance policy that covers the period from January 1, 2018 through December 31, 2018 31,200 January 11 Purchased supplies with cash. 10,000 January 15 Received cash for services provided to customers during January 76,000 January 18 Paid creditors on accounts payable. 46,000 January 28 Billed customers for services provided during January 105,250 January 29 Received January utility bill to be paid in February 8,200 January 31 Owner withdrew cash. 20,000 January 31 Paid January salaries. 115,000 Adjusting Entries: The following information is available when preparing adjusting entries at month-end: 1. One month's insurance has been used 2. An inventory on January 31 showed supplies remaining were valued at: 3. Equipment is depreciated at a monthly rate of. 4. Unearned revenue was earned in the amount of 5. One month's Interest must be accrued on the loan: annual rate is: $ $ 63,000 3,800 12,000 4%

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Answer 1

Journal Entries Adjusting Journal Entries Credit Credit Date Jan-01 Debit 195,000 Date Jan-31 Debit 2,600 $ Description Cash Notes Payable (To record issue of common stock for cash) Description Insurance Expense (31200/12) Prepaid Insurance (To record one month insurance expired) 195,000 2,600 Jan-02 $ 25,000 Jan-31 $ 7,000 Equipment Accounts Payable (To record equipment purchased on account) $ 25,000 Supplies expense (60000+ 10000-63000) Supplies (To record supplies consumed) $ 7,000 Jan-04 $ 2,250 Jan-31 $ 3,800 Rent expense Cash (To record rent expense paid in cash) $ 2,250 Depreciation expense Accumulated Depreciation (To record depreciation expense) $ 3,800 Jan-05 $ 64,000 Jan-31 $ 60,000 Cash Accounts Receivable (To record cash received on account) $ 64,000 Unearned Revenue Service Revenue To record unearned revenue earned) $ 60,000 Jan-09 31,200 Jan-31 $ 650 Prepaid Insurance Cash (To record one year insurance paid in cash) $ 31,200 Interest expense (195000-4% 112) Interest Payable (To record accrued interest for one month) $ 650 Jan-11 - 10,000 Supplies Cash (To record office supplies purchased for cash) $ 10,000 Jan-15 $ 76,000 Cash Service Revenue (To record cash received for services provided) 76,000 Jan-18 $ 48,000 Accounts Payable Cash (To record cash paid on account) 48,000 Jan-28 105,250 Accounts Receivable Service Revenue (To record services billed) $ 105,250 Jan-29 $ 8,200 Utilities expense Utilities Payable (To record utility bills received) $ 8,200 Jan-31 $ 20,000 Withdrawals Cash (To record withdrawals) $ 20,000 Jan-31 115,000 Salaries Expense Cash (To record salaries paid in cash) $ 115,000

I Accounts Accounts Payable 48,000 $ 80,000 $ 25,000 Owner Capital $ 565,000 Service Revenue $ 76,000 $ 105,250 $ 60,000 Cash 255,000 $ $ 195,000 $ $ 64,000 $ $ 76,000 $ $ $ $363,550 2,250 31,200 10,000 48,000 20,000 115,000 $ 57,000 565,000 $241,250 Interest Payable $ 650 Withdrawals 20,000 $ Rent Expense 2,250 $ Accounts Receivable $ 160,000 $ 64,000 $ 105,250 $ 650 $ 20,000 $ 2,250 Utilities Payable $ 8,200 Supplies Expense $ 7,000 $ 201,250 $ 7,000 $ Supplies 60,000 $ 10,000 7,000 $ 8,200 $ Salaries Expense $ 115,000 Unearned Revenue $ 60,000 $ 60,000 $ 63,000 $ 115,000 Prepaid Insurance 31,200 $ 2,600 Deprec. Expense $ 3,800 Notes Payable $ 195,000 $ 28,600 $ 3,800 Equipment 550,000 25,000 Insurance Expense $ 2,600 $ $ $ 195,000 $ 2,600 $575,000 Interest Expense 650 Accum. Deprec. $ 320,000 $ 3,800 $ 650 $323,800 Utilities Expense 8,200 $ 8,200