As of June 30, 2017, at the end of its most recent fiscal year, Primrose Comp Consultants' post-closing trial balance was as follows:

		Debit		Credit
Money		$5,860
accounts receivable		1,340
supplies		770
Accounts payable				$450
Unearned service income				1,250
Common actions				4,000
Retained earnings				2,270
		$7,970		$7,970

The company underwent a major expansion in July. New staff were hired and more funding was obtained. Culver made the following transactions during July 2017 and adjusts his accounts monthly.

Julio	1		He bought equipment, paid $4,000 in cash, and signed a 2-year promissory note for $22,400. The equipment has a useful life of 4 years. The note has an interest rate of 6% payable on the first day of each following month.
	2		Issued 22,400 common shares for $56,000 in cash.
	3		He paid $4,200 in cash for a 12-month insurance policy beginning July 1.
	3		Paid the first 2 months (July and August 2017) of rent for an annual office space lease for $4500 per month.
	6		He paid $4,300 for supplies.
	9		Visited client offices and agreed terms for a consulting project. Culver will bill the client, Connor Productions, on the 20th of each month for services rendered.
	10		He raised $1,340 in cash for a Milani Brothers account. This customer was billed in June when Culver performed the service.
	13		Services performed for Fitzgerald Enterprises. This client paid $1,250 in advance last month. All services related to this payment are already complete.
	14		You paid $450 in cash for a utility bill. This relates to the June earnings that were accumulated at the end of June.
	sixteen		I met with a new client, Thunder Bay Technologies. He received $13,400 cash in advance to perform future services.
	18		He paid biweekly salaries for $12,300.
	20		Services performed for a value of $31,400 on account and invoiced customers.
	20		You received a bill for $2,500 for advertising services received during July. The amount does not expire until August 15.
	23		I did the first phase of the project for Thunder Bay Technologies. It recognized $11,200 of revenue for the cash advance received on July 16.
	27		Received $16,800 in cash from customers billed on July 20.

Setting data:

1.		Adjustment of prepaid insurance.
2.		Prepaid Rent Adjustment.
3.		Used supplies, $1,400.
4.		Equipment depreciation, $550 per month.
5.		Accrual of interest on documents payable.
6.		Salaries for the second half of July, $12,300, to be paid on August 1.
7.		Estimated utility expense for July, $900 (bill due in August).
8.		July income tax, $1,340, due in August

Prepare July trading journal entries.

Answer rating: 100% (QA)

Prepare the July trading journal entries for Primrose Comp Consultants July 1 Equipment debit 4000 Cash credit 4000 July 2 Cash debit 56000 Common Sha... View the full answer