On December 1, a group of individuals formed a corporation to establish Arcadia News, a neighborhood newspaper featuring "Help Wanted" ads of individuals and advertising by local firms. The free paper will be mailed to about 20,000 local residents; revenue will be generated from advertising and want ads. The December transactions are summarized below:

The following transactions occurred during the month of December:

1	Sold common stock of Arcadia News, for cash.	$60,000
2	Paid December rent on furnished office.	5,000
3	Purchased on account, T-shirts displaying company,
	logo. The T-shirts were distributed at a grand opening.	550
4	Paid amount owed to creditor on account.	350
5	Collected "Help wanted" ad revenue in cash.	2,800
6	Paid post office for cost of bulk mailing.	710
7	Billed various firms for advertising in the first two issues of newspaper,	6,300
8	Paid Courier Service for transporting newspapers to post office.	70
9	Paid for printing newspaper.	3,900
10	Collected "Help wanted" ad revenue in cash.	4,570
11	Received invoice for December utilities, to be paid in January.	510
12	Paid for printing newspaper.	4,900
13	Paid December salaries.	6,100
14	Billed various firms for advertising in two issues of the newspaper.	8,950
15	Paid post office for cost of bulk mailing.	630
16	Paid Courier Service for transporting newspapers to post office.	60
17	Collected on accounts receivable.	5,100
18	Purchased fax machine for office in exchange,
	for a six month note payable. a. Set up accounts for the following: Cash, Accounts Receivable, Office Equipment, Accounts Payable, Notes Payable, Common Stock, Advertising Revenue, Want Ad Revenue, Printing Expense, Advertising Expense, Utilities Expense, Salaries Expense, Rent Expense, and Delivery Expense. Prepare journal entries in a general journal and record the foregoing transactions in the accounts. b. Prepare a trial balance as of December 31. c. Prepare an Income Statement for the month of December d. Prepare a balance sheet as of December 31. (Note: In this problem, the net income for December becomes the amount of retained earnings at December 31.	3,100

Answer rating: 100% (QA)

JOURNAL ENTRY 1 Cash 60000 Common stock 60000 sold common stock for cash 2 Rent expense 5000 Cash 5000 paid rent expense 3 Advertising expense 550 Acc... View the full answer