Question

Karla Tanner opens a Web consulting business called Linkworks and completed the following transactions in its first month of operations April 1 Tanner invested $80,000 cash along with office equipment valued at $26,000 in the company. 2 The company prepaid $9,000 cash for 12 months' rent for office space. Hint: Debit Prepaid Rent for $9, cee. 3 The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days. 6 The company completed services for a client and immediately received $4,000 cash. 9 The company completed a $6,000 project for a client, who must pay within 30 days. 13 The company paid $11,600 cash to settle the account payable created on April 3. 19 The company paid $2,400 cash for the premium on a 12-month insurance policy. Mint: Debit Prepaid Insurance for $2,400. 22 The company received $4,400 cash as partial payment for the work completed on April 9. 25 The company completed work for another client for $2,890 on credit. 28 Tanner withdrew $5,500 cash from the company for personal use. 29 The company purchased $600 of additional office supplies on credit. 30 The company paid $435 cash for this month's utility bill. Required: 1. Prepare general journal entries to record these transactions using the following titles: Cash (101); Accounts Receivable (106), Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131), Office Equipment (163) Accounts Payable (201): K. Tanner, Capital (301), K. Tanner, Withdrawals (302); Services Revenue (403); and Utilities Expense (690). 2. Post the journal entries from part 1 to the ledger accounts. 3. Prepare a trial balance as of April 30.

Answer 1

Credit (Being 101 3 General Journal I Date In Description wRetro Debit Cash 101 80,000 Office Equipment 163 26.000 Capital 301 1,06,000 Cash and Office Fquipment invested into the business.) 2 Pre Paid Rent 9,000 Cash 9.000 (Being rent Paid madvance) 1941250 Office Equipments A 163 8,000 Office Supplies 124 3,600 99 Accounts Payble 201 as it 11,600 (Being office fquipment and Supplies Purchased on Credit) Cash 4.000 Service Revenne 4.000 (Being revenue earned) go Accounts Receivable 106 6,000 Le service Revenue 403 (Being service revenue given on credit. ) Accounts Payble 11,600 Cash 11,600 F (Being Cash paid to the Creditors.) 6 PARIS 101 403 6,000 13 23201 101 2 Ref Date Debit 2400 No 128 101 Credit 2400 22 4400 101 106 4400 25 2890 106 403 2890 Description Prepaid In Sureance cas (Being Prepaid Insurance Paid for 12 months.) Cash Accounts Receivable (Being cash received from debtors al Pertical Payment) Accounts Receivable Sales Revenue (Being Sale revenue earned) 28 Withdrawls Cash (Being Cash withdrawn from business) Untities Expensa being office Supplies Purchase Office Supplies (Being office Supplies Surehase ) Utilities Expense 690 101 (scing utility by faid) 302 101 5500 5500 600 29 124 101 GOO Cash 600 30 435 Cash 435 Cash (101) Date Description Ref. Debit Credit Balomer ARR, 1 Invested to the business 301 80,000 2 Rent Paid in Advance 131 9,000 6 service Revenue earned 403 4000 13 Paid for Accounts Payble 201 11,600 Prepaid Innreance 128 22 Accounts Receivable 106 4400 28 Cash withdrawn 302 5,500 29 Office Supplies 124 600 So Utilities Expense hair 690 435 Balance 58865 2400 office Equipment (183) Date APR, 1 3 34,0000 Description Ref. Debit Credit Balance Capital invested 30! 24,000 Accounts Payble 201 8.000 Balance Capital (301 Description Ref. Debit Credit Balance Cash 101 80,000 Office Equipment 163 26,000 Balance 106,000 Dante APR, 1 Date APR, 2 Prepaid Rent (131) Description Ref Debit Credit Balance Cash IOL 9,000 Balance 9,000 Credit Balance Credit Balance Cash Office Supplies (124) Date Description Ref. Debit Apr 3 Accounts Payble 201 3600 20 Cash to 600 Balance 4200 This is accounts Payble (201) Date Description Ref. Debit [ APO 3 Office Equipment 163 8000 Office Supplies 124 3600 13 1o 11 600 J has no Service Revenue (403) Date Description Ref. Debit Credit Balance tapr 6 Cash 4000 'Accounts Receivable 106 6000 25 LOG 2890 Accounts Receivable - Balance 12,890/0 Accounts Receivable (106) Description Ref. Debit Credit Balance 403 6000 101 4400 106 2890 25 Service Revenne 4490 Balance lol Date Apr service Revenne 22 Cash Date Apr 19 Cash Pore Paid Insureance (128) Description Ref. Debit Credit Balance LIOL 2400 2 400 m Balance Withdrawl (302) Date Description Ref. Debit Credit Balance AP8,28 Cash 101 5500 Balance 5500lon Office Supplies (124) Date Description Ref. Debit credit Badance AP9,29 lash 600 Balance 600 m Utilities Expense (600 Date Description Ref. Debit erecht Barlance Apr 30 Cash 101 435 32 Balance 435 long Credit 106,000 Trial Balance Cost AS on April 30. Les Account Ref. Debit Cash 101 58865 office Equipment 163 34,000 Capital 301 Prepaid Rent 131 9,000 Office Supplies 124 4,200 Accounts Payble 201 service Revenue 403 Accounts Receivable 104 4,490 Prepaid Insureance 128 2400 Withdrawl 302 5900 office Suppliet 600 690 435 Utilities Expenses 12,890 119.890 118,890 Total