Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
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Chapter 2, Problem 69.1C
To determine
Journal Entries:
Journal entries are medium of recording business transactions. A business enterprise must record all the business transaction to evaluate net income or loss and analyze the financial performance of a company during a specified accounting period.
Journalize transactions which occurred during the month of January.
Expert Solution & Answer
Answer to Problem 69.1C
| Date | Accounts and Explanation | Debit | Credit |
| Jan. | |||
| 1 | Cash | $16,000 | |
| Common Stock | $16,000 | ||
| 1 | Cash | 25,000 | |
| Notes Payable | 25,000 | ||
| 1 | Legal Expense | 1,200 | |
| Cash | 1,200 | ||
| 1 | Equipment | 7,000 | |
| Cash | 7,000 | ||
| 1 | Rent Expense | 800 | |
| Cash | 800 | ||
| 3 | Prepaid Insurance | 3,600 | |
| Cash | 3,600 | ||
| 3 | Supplies | 2,500 | |
| Accounts Payable | 2,500 | ||
| 5 | No | ||
| 8 | Prepaid Rent | 10,000 | |
| Cash | 10,000 | ||
| 12 | Advertising Expense | 4,500 | |
| Cash | 4,500 | ||
| 18 | Accounts Payable | 1,000 | |
| Cash | 1,000 | ||
| 25 | Cash | 400 | |
| Accounts Receivable | 600 | ||
| Sales Revenue | 1,000 | ||
| 25 | Artist Fee Expense | 800 | |
| Cash | 800 | ||
| 28 | Cash | 3,800 | |
| Unearned Sales Revenue | 3,800 | ||
| 30 | Cash | 200 | |
| Accounts Receivable | 200 | ||
| 30 | Salaries Expense | 2,400 | |
| Cash | 2,400 | ||
Explanation of Solution
| Date | Assets | Liabilities | Equity |
| Jan. | |||
| 1 | Cash (Increase) | Common Stock (Increase) | |
| 1 | Cash (Increase) | Notes Payable (Increase) | |
| 1 | Cash (Decrease) | Legal Expense (Decrease) | |
| 1 | Equipment (Increase) | ||
| Cash (Decrease) | |||
| 1 | Cash (Decrease) | Rent Expense (Decrease) | |
| 3 | Prepaid Insurance (Increase) | ||
| Cash (Decrease) | |||
| 3 | Supplies (Increase) | Accounts Payable (Increase) | |
| 8 | Prepaid Rent (Increase) | ||
| Cash (Decrease) | |||
| 12 | Cash (Decrease) | Advertising Expense (Decrease) | |
| 18 | Cash (Decrease) | Accounts Payable (Decrease) | |
| 25 | Cash (Increase) | Sales Revenue (Increase) | |
| Accounts Receivable (Increase) | |||
| 25 | Cash (Decrease) | Artist Fee Expense (Decrease) | |
| 28 | Cash (Increase) | Unearned Sales Revenue (Increase) | |
| 30 | Cash (Increase) | ||
| Accounts Receivable (Decrease) | |||
| 30 | Cash (Decrease) | Salaries Expense (Decrease) | |
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Chapter 2 Solutions
Cornerstones of Financial Accounting
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Record the following transactions on Page 6 of the journal: 20. Purchased supplies on account, 735. 21. Provided services on account for the period May 1620, 4,820. 25. Received cash from cash clients for fees earned for the period May 1723, 7,900. 27. Received cash from clients on account, 9,520. 28. Paid part-time receptionist for two weeks' salary, 750. 30. Paid telephone bill for May, 260. 31. Paid electricity bill for May, 810. 31. Received cash from cash clients for fees earned for the period May 2631, 3,300. 31. Provided services on account for the remainder of May, 2,650. 31. Kelly withdrew 10,500 for personal use. Instructions 1.The chart of accounts for Kelly Consulting is shown in Exhibit 9, and the post-closing trial balance as of April 30, 2019, is shown in Exhibit 17. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, 2019, and place a check mark () in the Posting Reference column Journalize each of the May transactions in a two column Journal starting on Page 5 of the journal and using Kelly Consulting's chart of accounts. (Do not insert the account numbers in the journal at this time.) 2.Post the journal to a ledger of four-column accounts. 3Prepare an unadjusted trial balance. 4.At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6). a.Insurance expired during May is 275. b.Supplies on hand on May 3 1 are 715. c.Depreciation of office equipment for May is 330. d.Accrued receptionist salary on May 31 is 325. e.Rent expired during May is 1,600. f.Unearned fees on May 31 are 3,210. 5.(Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. 6.Journalize and post the adjusting entries. Record the adjusting entries on Page 7 of the journal. 7.Prepare an adjusted trial balance. 8.Prepare an income statement, a statement of owner's equity, and a balance sheet. 9.Prepare and post the closing entries. Record the closing entries on Page 8 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. 10.Prepare a post-closing trial balance.arrow_forward
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