Aracel Engineering completed the following transactions in the month of June.

  

a. Jenna Aracel, the owner, invested $245,000 cash, office equipment with a value of $6,600, and $79,000 of drafting equipment to launch the business.

  

b. Purchased land worth $52,000 for an office by paying $9,100 cash.

  

c. Purchased a portable building with $55,000 cash and moved it onto the land acquired in b.

  

d. Paid $3,800 cash for the premium on a 18-month insurance policy.

  

e. Completed and delivered a set of plans for a client and collected $6,200 cash.

  

f. Purchased $9,500 of additional drafting equipment by paying $9,500 cash.

  

g. Completed $14,000 of engineering services for a client. This amount is to be received in 30 days.

  

h. Purchased $1,150 of additional office equipment on credit.

  

i. Completed engineering services for $22,000 on credit.

  

j. Received a bill for rent of equipment that was used on a recently completed job. The $1,000 rent cost must be paid within 30 days.  

k. Collected $7,000 cash in partial payment from the client described in transaction g.

  

l. Paid $1,200 cash for wages to a drafting assistant.

  

m. Paid $1,150 cash to settle the account payable created in transaction h.

  

n. Paid $925 cash for minor repairs to its drafting equipment.

  

o. Jenna Aracel withdrew $9,480 cash for personal use.

  

p. Paid $1,200 cash for wages to a drafting assistant.

  

q. Paid $2,500 cash for advertisements in the local newspaper during June.

Required  

1. Prepare general journal entries to record these transactions (use the account titles listed in part 2).

  

2. Open the following ledger accounts—their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Prepaid Insurance (108); Office Equipment (163); Drafting Equipment (164); Building (170); Land (172); Accounts Payable (201); J. Aracel, Capital (301); J. Aracel, Withdrawals (302); Engineering Fees Earned (402); Wages Expense (601); Equipment Rental Expense (602); Advertising Expense (603); and Repairs Expense (604). Post the journal entries from part 1 to the accounts and enter the balance after each posting.

  

3. Prepare a trial balance as of the end of June.

Answer rating: 100% (QA)

Step 1 Journal entries are the first step of accounting which we record based on source documents then we post journal entries into ledger accounts Then we prepare the Trial balance Step 2 Journal ent... View the full answer