Question: Architectural Design and Associates Inc began business on May 1

Architectural Design and Associates, Inc., began business on May 1, 2011. The following transactions were entered into by the firm during its first two months of business, May and June:
May 1 Common stock was issued to investors in the amount of $275,000.
1 Architectural Design signed a long-term note with 1st Regional Bank for $65,000.
9 The company purchased an office building with cash for $130,500.
13 Equipment was purchased on account for $35,000.
20 Supplies worth $3,500 were purchased with cash.
27 Architectural Design paid for equipment that was purchased on May 13.
30 The company purchased a two-year insurance policy that began on June 1 with cash for $4,800.
30 The city utility bill for $675 was received by Architectural Design. The utility bill is always due the 15th of the following month and will be paid then.
June 1 Architectural Design purchased some inventory on account for $50,000.
3 The company purchased some advertising in a local newspaper and on a local radio station for $5,000 cash.
15 May’s utility bill for $675 was paid. (Note that the bill was recorded as a payable in May.)
30 June salaries of $12,500 were owed to employees who started during the month.
Salaries are always paid the last day of the month earned.
30 Architectural Design earned service revenues of $60,000 for the month, of which $15,000 were on account.
30 Architectural Design received the city utility bill for $625.

1. Give the journal entry for each transaction.
2. Post each transaction to T-accounts.
3. Prepare an unadjusted trial balance.

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  • CreatedSeptember 01, 2014
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