Health & Nutrition Importance, Inc., began business July 1, 2012. The following transactions took place during July:
July 1 The owners invested $75,000 in exchange for common stock.
1 The company borrowed $15,000 from a local bank with a 4% note and a six-month term. Both the principal and interest will be repaid in six months.
1 The company purchased health equipment for $28,500 cash. It should last five years, with no residual value.
5 The company purchased supplies on account for $750.
15 The company paid rent of $675 for July in cash.
23 The company received $3,500 in customer dues (service revenues) for the month of August.
31 The company performed consulting services during July on account that totaled $15,000.
31 The company paid salaries of $6,000 to employees.
31 The company paid $500 to the supplies vendor as part of the $750 owed to the vendor from the purchase on July 5. The company only paid part of the invoice because it only used $500 worth of the supplies in July.
Give the journal entry for each transaction. Provide the reason for each entry. Then, make the necessary adjusting entries at July 31,
2012. What else should be done to finish the accounting cycle for the month?