HB Spill Services, Inc. is the company you started on December 1, 2020. The following transactions occurred during the month of December 2020:

1. The business was started with a $25,000 capital investment from the owner and sole shareholder on December 1, 2020. The funds were obtained from a $25,000 personal loan from a bank.
2. Rent for $5,000 for the month of December along with a $2,000 prepaid deposit was paid on December 2^nd.
3. Equipment and supplies were purchased on account on December 5^th for $4,000 and $1,000 respectively.
4. Services were performed on December 10^th for $15,000 in cash.
5. Payment was made on December 15^th for the equipment purchased on account.
6. A client paid you $2,500 for your services to be performed in January 2021.
7. An insurance policy covering December 2020 to December 2021 was paid for $3,600.
8. Salaries for the office assistant of $4,000 are paid monthly on the first of the following month.

Journalize the above transactions in proper journal entry form (excluding explanations) (16 Points)

You assembled the following data possibly related to transactions in December 2020:

1. 1 Service performed but unbilled during the month were $5,000.
2. 2 Depreciation for the equipment for the month was $200.
3. 3 An attorney invoice for $1,000 was received in January 2021 related to formation of the company.
4. 4 Supplies existing at December 31, 2021 totaled $300.
5. 5 Equipment was appraised and increased in value to $2,500.
6. 6 You performed $1,000 of work in December for the client that paid in advance.
7. 7 An adjusting entry may be required for the insurance policy.
8. 8 An adjusting entry may be required for salaries.

Prepare the three basic financial statements in proper format at and for the month ended December 31, 2020

Answer rating: 100% (QA)

1 Date Account Title 1Dec20 Cash Common Stock 2Dec20 Security Deposit Rent Expen... View the full answer