Question

Aracel Engineering completed the following transactions in the month of June. a. Jenna Aracel, the owner, invested $250,000 cash, office equipment with a value of $7.000, and $79,000 of drafting equipment to launch the company in exchange for common stock b. The company purchased land worth $60,000 for an office by paying $9,900 cash and signing a long-term note payable for $50,100. c. The company purchased a portable building with $54.000 cash and moved it onto the land acquired in b. d. The company paid $5,000 cash for the premium on an 18-month insurance policy. e. The company completed and delivered a set of plans for a client and collected $6,300 cash. f. The company purchased $20,000 of additional drafting equipment by paying $9,400 cash and signing a long-term note payable for $10.600. g. The company completed $13,500 of engineering services for a client. This amount is to be received in 30 days. h. The company purchased $1,900 of additional office equipment on credit. i. The company completed engineering services for $22,000 on credit. j. The company received a bill for rent of equipment that was used on a recently completed job. The $1,326 rent cost must be paid within 30 days. k. The company collected $8.000 cash in partial payment from the client described in transaction g. 1. The company paid $2,200 cash for wages to a drafting assistant m. The company paid $1,900 cash to settle the account payable created in transaction h. n. The company paid $1,165 cash for minor maintenance of its drafting equipment. < Prex 2 of 4 !!! Next > 1 C 0 ** $ 4 % 5 & 7. 3 6 8 9 0

Answer 1

S.No.	Accounts/ Explanation	Debit	Credit
a.	Cash	250,000
	Office Equipment	7,000
	Drafting Equipment	79,000
	J. Aracel, Capital		336,000
	(invested $250,000 cash, office equipment with a value of $7,000, and $79,000 of drafting equipment )
b.	Land	60,000
	Cash		9,900
	Notes Payable		50,100
	(purchased land worth $60,000 for an office by paying $9.900 cash and signing a long-term note payable for $50,100)
c.	Building	54,000
	Cash		54,000
	(purchased a portable building with $54,000 cash)
d.	Prepaid Insurance	5,000
	Cash		5,000
	(paid $5,000 cash for the premium on an 18-month insurance policy)
e.	Cash	6,300
	Engineering Fees Earned		6,300
	(completed and delivered a set of plans for a client and collected $6,300 cash)
f.	Drafting Equipment	20,000
	Cash		9,400
	Notes Payable		10,600
	(purchased $20,000 of additional drafting equipment by paying $9,400 cash and signing a long-term note payable for $10,600)
g.	Accounts Receivables	13,500
	Engineering Fees Earned		13,500
	(completed $13,500 of engineering services for a client. This amount is to be received in 30 days)
h.	Office Equipment	1,900
	Accounts Payable		1,900
	(purchased $1,900 of additional office equipment on credit.)
i.	Accounts Receivables	22,000
	Engineering Fees Earned		22,000
	(completed engineering services for $22,000 on credit)
j.	Equipment Rental Expense	1,326
	Accounts Payable		1,326
	(received a bill for rent of equipment )
k.	Cash	8,000
	Accounts Receivables		8,000
	(collected $8,000 cash in partial payment from the client)
l.	Wages Expense	2,200
	Cash		2,200
	(paid $2,200 cash for wages to a drafting assistant)
m.	Accounts Payable	1,900
	Cash		1,900
	(paid $1,900 cash to settle the account payable)
n.	Repairs Expense	1,165
	Cash		1,165
	(paid $1,165 cash for minor maintenance of its drafting equipment)