Binbutti Engineering, a sole proprietorship, completed the following transactions during

Binbutti Engineering, a sole proprietorship, completed the following transactions during July 2020, the third month of operations:

Bob Binbutti, the owner, invested $300,000 cash, office equipment with a value of $12,000, and $90,000 of drafting equip


Required

1. Prepare journal entries to record the transactions. Use page 1 for the journal.

2. Set up the following general ledger accounts (use the balance column format or T-accounts), entering the balances brought forward from June 30, 2020: Cash (101) $26,000; Accounts Receivable (106) $3,000; Prepaid Insurance (128) $500; Office Equipment (163) $1,700; Drafting Equipment (167) $1,200; Building (173) $42,000; Land (183) $28,000; Accounts Payable (201) $1,740; Long-Term Notes Payable (251) $24,000; Bob Binbutti, Capital (301) $54,000; Bob Binbutti, Withdrawals (302) $1,000; Engineering Revenue (401) $29,600; Wages Expense (623) $4,000; Equipment Rental Expense (645) $1,000; Advertising Expense (655) $640; and Repairs Expense (684) $300.

3. Post the entries to the general ledger accounts and enter the balance after each posting.

4. Prepare a trial balance at July 31, 2020.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...