Continuing Problem Chapter 2 - Instruction #2

The transactions completed by PS Music during June 20Y5. The following transactions were completed during July, the second month of the businesss operations:

Analyze and journalize each transaction in the two-column journal below. Include Posting References, using the account numbers in your spreadsheet.

If an amount box does not require an entry, leave it blank.

July 1:Peyton Smith made an additional investment in PS Music in exchange for common stock by depositing $5,000 in PS Musics checking account.

Account	Post. Ref.	Debit	Credit

July 1:Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, $1,750.

Account	Post. Ref.	Debit	Credit

July 1:Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period.

Account	Post. Ref.	Debit	Credit

July 2:Received $1,000 on account.

Account	Post. Ref.	Debit	Credit

July 3:On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600. Any additional hours beyond 80 will be billed to KXMD at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment for the first two months.

Account	Post. Ref.	Debit	Credit

July 3:Paid $250 on account.

Account	Post. Ref.	Debit	Credit

July 4:Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.)

Account	Post. Ref.	Debit	Credit

July 5:Purchased office equipment on account from Office Mart, $7,500.

Account	Post. Ref.	Debit	Credit

July 8:Paid for a newspaper advertisement, $200.

Account	Post. Ref.	Debit	Credit

July 11:Received $1,000 for serving as a disc jockey for a party.

Account	Post. Ref.	Debit	Credit

July 13:Paid $700 to a local audio electronics store for rental of digital recording equipment.

Account	Post. Ref.	Debit	Credit

July 14:Paid wages of $1,200 to receptionist and part-time assistant.

Account	Post. Ref.	Debit	Credit

July 16:Received $2,000 for serving as a disc jockey for a wedding reception.

Account	Post. Ref.	Debit	Credit

July 18:Purchased supplies on account, $850.

Account	Post. Ref.	Debit	Credit

July 21:Paid $620 to Upload Music for use of its current music demos in making various music sets.

Account	Post. Ref.	Debit	Credit

July 22:Paid $800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July.

Account	Post. Ref.	Debit	Credit

July 23:Served as disc jockey for a party for $2,500. Received $750, with the remainder due August 4, 20Y5.

Account	Post. Ref.	Debit	Credit

July 27:Paid electric bill, $915.

Account	Post. Ref.	Debit	Credit

July 28:Paid wages of $1,200 to receptionist and part-time assistant.

Account	Post. Ref.	Debit	Credit

July 29:Paid miscellaneous expenses, $540.

Account	Post. Ref.	Debit	Credit

July 30:Served as a disc jockey for a charity ball for $1,500. Received $500, with the remainder due on August 9, 20Y5.

Account	Post. Ref.	Debit	Credit

July 31:Received $3,000 for serving as a disc jockey for a party.

Account	Post. Ref.	Debit	Credit

July 31:Paid $1,400 royalties (music expense) to National Music Clearing for use of various artists' music during July.

Account	Post. Ref.	Debit	Credit

July 31:Paid dividends, of $1,250.

Account	Post. Ref.	Debit	Credit