Question

P4.5B (LO 1, 2) AP Laura Eddy opened Eddy's Carpet Cleaners on March 1, 2021. In March, the follow- ing transactions were completed: Mar. 1 Laura invested $10,000 cash in the business. 1 Purchased a used truck for $6,500, paying $1,500 cash and signing a note payable for the balance. 3 Purchased supplies for $1,200 on account. 5 Paid $1,200 on a one-year insurance policy, effective March 1. 12 Billed customers $4,800 for cleaning services. 18 Paid $500 of amount owed on supplies. 20 Paid $1,800 for employee salaries.

Answer 1

Date	Particulars	Debit	Credit
March 1st	Cash A/c Dr	10000
	To Capital A/c		10000
March 1st	Truck A/c Dr	6500
	To Cash A/c		1500
	To Note payable A/c		5000
March 3rd	Supplies A/c Dr	1200
	To bill payable A/c		1200
March 5th	Insurance exp A/c Dr	1200
	To Cash A/c		1200
Mar 12th	Accounts receivable A/c Dr	4800
	To Service revenue A/c		4800
Mar 18th	Bill payable A/c dr	500
	To Cash A/c		500
Mar 20th	Salaries A/c Dr	1800
	To Cash A/c		1800
Mar 21st	Accounts receivable A/c dr	1400
	To Cash A/c		1400
Mar 31st	Accounts receivable A/c Dr	2500
	To Service revenue A/c		2500
Mar 31st	Repair Exp A/c dr	375
	To Cash A/c		375
Mar 31st	Drawings A/c dr	900
	To Cash A/c		900
Mar 31st	Prepaid Insurance A/c Dr	1100
	To Insurance Exp A/c		1100
	(1200*11/12)
Mar 31st	Depreciation A/c Dr	108.33
	To Accumulated Depre on truck A/c		108.33
	(6500/5*1/12)
Mar 31st	Salaries A/c dr	500
	To Salary payable A/c		500
Mar 31st	Accounts receivable A/c Dr	500
	To Service revenue A/c		500
Mar 31st	Interest exp A/c Dr	18.75
	To Interest payable A/c		18.75
	(5000*4.5%*1/12)

Trail balance	Debit	Credit
Cash A/c	6425
Capital A/c		10000
Supplies A/c	400
Bill payable A/c		700
Truck A/c	6500
Note Payable		5000
Insurance exp	100
Prepaid insurance	1100
Accounts receivable	5900
Service revenue		7300
Salaries	1800
Repairs	375
Drawings	900
Depreciation	108.33
Accumulate depre		108.33
Salary payable		500
Interet exp	18.75
Interst payable		18.75
	23627.08	23627.08