Question

a. Borrowed $125,000 from a bank, signing a short-term note payable. b. Provided $102,600 in service to customers, with $97,400 on account and the rest received in cash. c. Purchased equipment for $175,000 in cash. d. Incurred and paid employee wages of $2,250. e. Received $745 on account from a customer. f. Incurred and paid $4,200 cash for travel costs during the year. g. Paid $8,000 cash on accounts payable. h. Incurred $22,500 in utility expenses during the year, of which $16,900 was paid in cash and the rest owed on account. Required: 1. For each of the above transactions, prepare accrual basis journal entries. 2. Calculate the company's preliminary net income. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the company's preliminary net income. Preliminary Net Income

Answer 1

Transaction	General Journal	Debit	Credit
a	Cash	125,000
	Notes payable		125,000
	( To record issuance of note)
b	Cash	5,200
	Accounts receivable	97,400
	Service revenue		102,600
	( To record service revenue)
c	Equipment	175,000
	Cash		175,000
	( To record purchase of equipment)
d	Wages expense	2,250
	Cash		2,250
	( To record wages expense)
e	Cash	745
	Accounts receivable		745
	( To record amount received from customers)
f	Travel expense	4,200
	Cash		4,200
	( To record travel expense)
g	Accounts payable	8,000
	Cash		8,000
	( To record payment to creditors)
h	Utility expense	22,500
	Cash		16,900
	Utilities payable		5,600
	( To record utilities expense)

2.

Income Statement
Service revenue	102,600
Expenses:
Wages expense	-2,250
Travel expense	-4,200
Utility expense	-22,500
Preliminary net income	$73,650

Kindly comment if you need further assistance. Thanks‼!