Julie Jones decided to open her own dry cleaning shop, Prestige Dry Cleaners, Inc. The following transactions are the events that occurred during
April 2013, the company’s first month:
April 1 Julie contributed $45,000 cash in exchange for common stock. She also signed a note with 1st Regional Bank for $30,000.
3 The company rented a store at a shopping center and paid $14,400 prepaid rent for the first year.
10 The company purchased dry cleaning equipment on account for $21,250.
19 The company purchased insurance for three years with $5,400 cash. The policy was effective May 1.
21 Part of the equipment purchased on April 10 was damaged. The supplier agreed to remove $3,150 from Prestige Dry Cleaners’ account.
24 The company purchased furniture for $6,000 for Julie’s office on account.
27 The company paid off the balance owed on the equipment.
30 Three employees were hired at a rate of $56 a day each. Their start date is May 1.

Give the journal entry for each transaction. Set up the required T-accounts and post the entries to these accounts. Prepare an unadjusted trial balance.

  • CreatedSeptember 01, 2014
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