Applying the rules of debit and credit, posting, and preparing a trial balance [15-25 min]
Refer to the transactions of London Engineering in Exercise
Requirements
1. Open the following T-accounts with their July 1 balances: Cash, debit balance $4,000; Accounts receivable $0; Equipment $0; Land, debit balance $29,000; Supplies $0; Accounts payable $0; Notes payable $0; Common stock, credit balance $33,000; Service revenue $0; Utilities expense $0.
2. Post the transactions of Exercise to the T-accounts. Use the dates as posting references. Start with July 2.
3. Compute the July 31, 2012, balance for each account, and prove that total debits equal total credits by preparing a trial balance.
Analyzing and journalizing transactions [10-15 min]
The following transactions occurred for London Engineering:
Jul 2 | Paid utilities expense of $400. |
5 | Purchased equipment on account, $2,100. |
10 | Performed service for a client on account, $2,000. |
12 | Borrowed $7,000 cash, signing a note payable. |
19 | Sold for $29,000 land that had cost this same amount. |
21 | Purchased supplies for $800 and paid cash. |
27 | Paid the liability from July 5. |
Requirement
1. Identify and perform the three steps to record the previously described transactions.
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