For the past several years, Steffy Lopez has operated a part$-$time consulting business from his home. As of July $1,20$Y$2,$ Steffy decided to move to rented quarters and to operate the business, which was to be known as Diamond Consulting, on a full$-$time basis. Diamond entered into the following transactions during July:

Jul. $1$ The following assets were received from Steffy Lopez in exchange for common stock: cash, $$12,500$; accounts receivable, $$20,800$; supplies, $$3,100$; and office equipment, $$7,500.$ There were no liabilities received.

$1$ Paid two months$$ rent on a lease rental contract, $$4,800.$

$2$ Paid the premiums on property and casualty insurance policies, $$4,500.$

$4$ Received cash from clients as an advance payment for services to be provided, and recorded it as unearned fees, $$5,500.$

$5$ Purchased additional office equipment on account from Office Station Co$.,$ $$6,500.$

$6$ Received cash from clients on account, $$15,300.$

$10$ Paid cash for a newspaper advertisement, $$400.$

$12$ Paid Office Station Co$.$ for part of the debt incurred on July $5,$ $$5,200.$

$12$ Recorded services provided on account for the period July $112,$ $$13,300.$

$14$ Paid receptionist for two weeks$$ salary, $$1,700.$

Record the following transactions on Page $2$ of the journal:

Jul. $17$ Recorded cash from cash clients for fees earned during the period July $117,$ $$9,450.$

$18$ Paid cash for supplies, $$600.$

$20$ Recorded services provided on account for the period July $1320,$ $$6,650.$

$24$ Recorded cash from cash clients for fees earned for the period July $1724,$ $$5,000.$

$26$ Received cash from clients on account, $$12,000.$

$27$ Paid receptionist for two weeks$$ salary, $$1,700.$

$29$ Paid telephone bill for July, $$400.$

$31$ Paid electricity bill for July, $$675.$

$31$ Recorded cash from cash clients for fees earned for the period July $2531,$ $$5,200.$

$31$ Recorded services provided on account for the remainder of July, $$3,000.$

$31$ Paid dividends, $$12,500.$

Required:

$1.$ Journalize each transaction in a two$-$column journal starting on Page $1.($Do not insert the account numbers in the journal at this time.$)$

$2.$ Post the journal to a ledger of four$-$column accounts. Add the appropriate posting reference to the journal.

$3.$ Prepare an unadjusted trial balance.

$4.$ At the end of July, the following adjustment data were assembled. Analyze and use these data to complete requirements $(5)$ and $(6).$

$($a$)$ Insurance expired during July is $$375.$

$($b$)$ Supplies on hand on July $31$ are $$1,550.$

$($c$)$ Depreciation of office equipment for July is $$750.$

$($d$)$ Accrued receptionist salary on July $31$ is $$170.$

$($e$)$ Rent expired during July is $$2,400.$

$($f$)$ Unearned fees on July $31$ are $$2,750.$

$5.($Optional$)$ On your own paper or spreadsheet, enter the unadjusted trial balance on an end$-$of$-$period work sheet and complete the work sheet.

$6.$

A$.$ Journalize the adjusting entries on page $3$ of the journal. Adjusting entries are recorded on July $31.$

B$.$ Post the adjusting entries, inserting balances in the accounts affected.

$7.$ Prepare an adjusted trial balance.

$8.$

A$.$ Prepare an income statement for the month ended July $31,20$Y$2.$

B$.$ Prepare a statement of stockholders$$ equity for the month ended July $31,20$Y$2.$

C$.$ Prepare a balance sheet as of July $31,20$Y$2.$

$9.$

A$.$ Journalize the closing entries on page $4$ of the journal.

B$.$ Post the closing entries, inserting balances in the accounts affected.

$10.$ Prepare a post$-$closing trial balance.

Answer rating: 100% (QA)

Lets start by journalizing each transaction in a twocolumn journal Page 1 Date Description Debit Credit Jul 1 Cash Common stock issuance 12500 Accounts Receivable Common stock issuance 20800 Supplies ... View the full answer