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The transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the business’s operations: July 1. Peyton Smith made an additional investment in PS Music by depositing $5,000 in PS Music’s checking account. 1. Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, $1,750. 1. Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2. Received $1,000 cash from customers on account. 3. On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600. Any additional hours beyond 80 will be billed to KXMD at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment for the first two months. 3. Paid $250 to creditors on account. 4. Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5. Purchased office equipment on account from Office Mart, $7,500. 8. Paid for a newspaper advertisement, $200. 11. Received $1,000 for serving as a disc jockey for a party. 13. Paid $700 to a local audio electronics store for rental of digital recording equipment. 14. Paid wages of $1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: 16. Received $2,000 for serving as a disc jockey for a wedding reception. 18. Purchased supplies on account, $850. July 21. Paid $620 to Upload Music for use of its current music demos in making various music sets. 22. Paid $800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23. Served as disc jockey for a party for $2,500. Received $750, with the remainder due August 4, 2019. 27. Paid electric bill, $915. 28. Paid wages of $1,200 to receptionist and part-time assistant. 29. Paid miscellaneous expenses, $540. 30. Served as a disc jockey for a charity ball for $1,500. Received $500, with the remainder due on August 9, 2019. 31. Received $3,000 for serving as a disc jockey for a party. 31. Paid $1,400 royalties (music expense) to National Music Clearing for use of various artists’ music during July. 31. Withdrew $1,250 cash from PS Music for personal use. PS Music’s chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows: Instructions 1. Enter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark (✓) in the Posting Reference column. ( Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2. Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Prepare an unadjusted trial balance as of July 31, 2019.

BuyFind

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124
BuyFind

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

Solutions

Chapter
Section
Chapter 2, Problem 1COP
Textbook Problem

The transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the business’s operations:

July 1.    Peyton Smith made an additional investment in PS Music by depositing $5,000 in PS Music’s checking account.

1.    Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, $1,750.

1.    Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period.

2.    Received $1,000 cash from customers on account.

3.    On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600. Any additional hours beyond 80 will be billed to KXMD at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment for the first two months.

3.    Paid $250 to creditors on account.

4.    Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.)

5.    Purchased office equipment on account from Office Mart, $7,500.

8.    Paid for a newspaper advertisement, $200.

11.    Received $1,000 for serving as a disc jockey for a party.

13.    Paid $700 to a local audio electronics store for rental of digital recording equipment.

14.    Paid wages of $1,200 to receptionist and part-time assistant.

Enter the following transactions on Page 2 of the two-column journal:

16.    Received $2,000 for serving as a disc jockey for a wedding reception.

18.    Purchased supplies on account, $850.

July 21. Paid $620 to Upload Music for use of its current music demos in making various music sets.

22.    Paid $800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July.

23.    Served as disc jockey for a party for $2,500. Received $750, with the remainder due August 4, 2019.

27.    Paid electric bill, $915.

28.    Paid wages of $1,200 to receptionist and part-time assistant.

29.    Paid miscellaneous expenses, $540.

30.    Served as a disc jockey for a charity ball for $1,500. Received $500, with the remainder due on August 9, 2019.

31.    Received $3,000 for serving as a disc jockey for a party.

31.    Paid $1,400 royalties (music expense) to National Music Clearing for use of various artists’ music during July.

31.    Withdrew $1,250 cash from PS Music for personal use.

PS Music’s chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows:

Chapter 2, Problem 1COP, The transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The

Instructions

  1. 1. Enter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark (✓) in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.)
  2. 2. Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations.
  3. 3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting.
  4. 4. Prepare an unadjusted trial balance as of July 31, 2019.

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Chapter 2 Solutions

Financial Accounting
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