In December 2016, Mike Mills opened a miniature golf course to cater for the summer holiday tourists and completed the transactions below during its first month of operations. For the sake of simplicity, GST is ignored.

Dec.

1 2 4 6 15 24 31 31 31

Invested $90 000 capital in the business. Purchased golf clubs and balls and other equipment costing $80000 for $40000 cash and a loan for $40000. Paid $1500 for advertising. Purchased supplies on credit for $6200. Recorded cash revenue for the first half of the month of $8400. Withdrew $720 from the business bank account for personal use. Recorded cash revenue for the second half of the month of $10 100. Paid wages of $2700. Paid rent for December, $2400.

Use the following account titles and numbers:

Cash at Bank, 1–100

Supplies, 1–110

Equipment, 1–120

Accounts Payable, 2–100

Loan Payable, 2–110

M. Mills, Capital, 3–100

M. Mills, Drawings, 3–110

Revenue, 4–100

Rent Expense, 5–100

Advertising Expense, 5–110

Wages Expense, 5–120

Required

A. Prepare general journal entries to record the December transactions.

B. Post the entries from the general journal to running balance general ledger accounts and enter the posting references in the journal.

C. Prepare a trial balance as at 31 December 2016. 

The following transactions took place in January:

Jan.

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Paid $1800 of the amount owed for supplies. Paid $820 for advertisements in local newspaper. Mike withdrew $1000 from the business for personal use. Recorded cash revenue for the first half of January of $7800. Paid wages of $2400 in cash. Purchased supplies on credit for $3100. Recorded cash revenue for the second half of January of $9400. Paid rent for January, $2400.

Required:

D. Prepare journal entries to record the January transactions.

E.  Post the entries to the ledger.

F.  Prepare a trial balance as at 31 January 2017.