Question

weite out the journal entries for each transaction

Date Description 2019 Began business. Owners deposit $10,000 in exchange for 1-Jan 1,000 shares of $10.00 par value common stock. Borrowed $25,000 from the bank. Signed a 2 year note with interest at 4.5%. Interest is payable June 30 and 10-Jan December 31 of each year. Signed a lease agreement to rent office space for $975 per month, beginning Feb 14 Nothing was paid today. 12-Jan (Question: do we owe rent for January?) Purchased computer equipment for the office. Cost is $22,000. The equipment will be depreciated straight line over 5 years using a month for the month of purchase. Wrote check for payment. Depreciation for Jan to March will be $1,062.50. (Record depreciation in the adjusting 15-Jan entries.) Hired an outside technician to set up the equipment. Received a bill for $3,500, which is due on Feb 22. (accounts payable) (Capitalize if it is part of the asset cost 22-Jan Research this.) Received the following bills due March 15: telephone $275, 15-Feb and rent for $975. 20-Feb Paid the technician's bill from Jan 22. Purchased computers as inventory to sell to customers. 01-Mar Purchased 50 computers at a cost of $800 each. Invoice is payable in 30 days. Shipping costs are included in the price. Sold 10 computers to George's Woolens, Inc. at a price of $900 each. Also performed installation services. Sent client 12-Mar an invoice for $13,800. (The invoice total includes the computer sales and the installation services - there are two separate G/L income accounts. Also, perpetual inventory.) 15-Mar Paid bills received Feb 15. Received the following bills due April 15: telephone $345 15-Mar and office supplies $760. Completed a consulting project for Able Therapies, Inc. 17-Mar Sent client an invoice for $2.400. Received a check for $5,000 from JAR Manufacturing as a 20-Mar deposit for an installation to be done in April. Received payment for 50% of the invoice from George's 22-Mar Woolens.

Answer 1

Journal entries
Date	Account	Debit	Credit	Calculation
1-Jan	Cash	10,000.00
	Common Stock		10,000.00
10-Jan	Cash	25,000.00
	Notes Payable		25,000.00
12-Jan	No entry
	As its only an agreement & expense is not related to Jan
15-Jan	Computer Equipment	22,000.00
	Cash		22,000.00
22-Jan	Computer Equipment	3,500.00
	Accounts Payable		3,500.00
15-Feb	Telephone expense	275.00
	Rent expense	975.00
	Accounts Payable		1,250.00
20-Feb	Accounts Payable	3,500.00
	Cash		3,500.00
1-Mar	Inventory	40,000.00		=50*800
	Accounts Payable		40,000.00
12-Mar	Accounts Receivable	13,800.00
	Sales Revenue		9,000.00	=10*900
	Service Revenue		4,800.00	=13,800-9,000
	Cost of goods sold	8,000.00		=10*800
	Inventory		8,000.00
15-Mar	Accounts Payable	1,250.00
	Cash		1,250.00
15-Mar	Telephone expense	345.00
	Office Supplies	760.00
	Accounts Payable		1,105.00
17-Mar	Accounts Receivable	2,400.00
	Service Revenue		2,400.00
20-Mar	Cash	5,000.00
	Unearned Revenue		5,000.00
22-Mar	Cash	6,900.00		=22,800*50%
	Accounts Receivable		6,900.00
22-Mar	Rent expense	975.00		Mar rent
	Prepaid Rent	1,950.00		=975*2 - Apr & May rent
	Cash		2,925.00
31-Mar	Accounts Receivable	4,500.00
	Service Revenue		4,500.00
17-Mar	Technician expenses	1,800.00
	Accounts Payable		1,800.00
17-Mar	Technician expenses	875.00
	Cash		875.00
31-Mar	Technician expenses	2,400.00
	Accounts Payable		2,400.00
Adjusting entries
31-Mar	Depreciation expense	1,062.50
	Accumulated Depreciation-Computer Equipment		1,062.50
31-Mar	Interest expense	250.00		=25,000*4.5%*2.6667/12
	Interest Payable		250.00
31-Mar	Bad debt expense	6,900.00		=22,800-11,400
	Allowance for doubtful accounts		6,900.00
Note
Interest from 10 Jan to 31 Mar, so 2/3rd or 0.6667 of Jan month & 2 months of Feb & Mar
As subsequent event is on 28 April, but is related to condition (Accounts Receivable) existing on Balance Sheet date
adjusting entry is passed on 31 March to account for allowance for doubtful accounts