Kang Ltd. had the following opening account balances at July 31: Cash $4,000; Accounts Receivable $2,000; Equipment $2,500; Accounts Payable $1,500; Common Shares $2,000; and Retained Earnings $5,000. Kang's general journal for the month of August is presented here:

Instructions
(a) Prepare an explanation for each of the journal entries listed above.
(b) Set up T accounts, enter the opening balances at July 31, post the August journal entries to the general ledger, and determine the ending balances in each account.
(c) Prepare a trial balance at August 31.

Transcribed Image Text:

GENERAL JOURNAL Date Account Titles Debit Credit Aug. 7 Cash 1,800 Service Revenue 1,800 10 Equipment 4,000 Cash Bank Loan Payable 1,500 2,500 14 Accounts Receivable 1,450 Service Revenue 1,450 16 Cash 900 Unearned Revenue 28 Cash 900 700 Accounts Receivable 700 30 Salaries Expense 2,000 Cash 2,000 31 Dividends Declared5oo Cash 500