Journalizing, Posting, and Preparing a Trial Balance
The McMillan Corporation incorporated on September 2, 2011. The company engaged in the following transactions during its first month of operations:
Sept. 2 | Issued capital stock in exchange for $900,000 cash. |
Sept. 4 | Purchased land and a building for $350,000. The value of the land was $50,000, and the value of the building was $300,000. The company paid $200,000 cash and issued a note payable for the balance. |
Sept. 12 | Purchased office supplies for $600 on account. The supplies will last for several months. |
Sept. 19 | Billed clients $75,000 on account. |
Sept. 29 | Recorded and paid salary expense of $24,000. |
Sept. 30 | Received $30,000 from clients billed on September 19. |
A partial list of the account titles used by the company includes:
Cash | Notes Payable |
Accounts Receivable | Accounts Payable |
Office Supplies | Capital Stock |
Land | Client Revenue |
Building | Salary Expense |
a. Prepare journal entries, including explanations, for the above transactions.
b. Post each entry to the appropriate ledger accounts (use the T account format illustrated in Exhibit 3-8 on page 108).
c. Prepare a trial balance dated September 30, 2011. Assume accounts with zero balances are not included in the trial balance
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