On October 1, 2021, Santana Rey launched a computer services company called Business Solutions, which provides consulting
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On October 1, 2021, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. The company's initial chart of accounts follows.
Account | Number | Account | Number |
---|---|---|---|
Cash | 101 | Common stock | 307 |
Accounts Receivable | 106 | Dividends | 319 |
Computer Supplies | 126 | Computer Services Revenue | 403 |
Prepaid Insurance | 128 | Wages Expense | 623 |
Prepaid Rent | 131 | Advertising Expense | 655 |
Office Equipment | 163 | Mileage Expense | 676 |
Computer Equipment | 167 | Miscellaneous Expenses | 677 |
Accounts Payable | 201 | Repairs ExpenseComputer | 684 |
October 1 | S. Rey invested $48,000 cash, a $23,000 computer system, and $8,000 of office equipment in the company in exchange for common stock. |
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October 2 | The company paid $3,300 cash for four months' rent. Hint: Debit Prepaid Rent for $3,300. |
October 3 | The company purchased $1,370 of computer supplies on credit from Harris Office Products. |
October 5 | The company paid $1,740 cash for one year's premium on a property and liability insurance policy. Hint: Debit Prepaid Insurance for $1,740. |
October 6 | The company billed Easy Leasing $5,700 for services performed in installing a new Web server. |
October 8 | The company paid $1,370 cash for the computer supplies purchased from Harris Office Products on October 3. |
October 10 | The company hired Lyn Addie as a part-time assistant. |
October 12 | The company billed Easy Leasing another $2,400 for services performed. |
October 15 | The company received $5,700 cash from Easy Leasing as partial payment on its account. |
October 17 | The company paid $770 cash to repair computer equipment that was damaged when moving it. |
October 20 | The company paid $1,718 cash for advertisements. |
October 22 | The company received $2,400 cash from Easy Leasing on its account. |
October 28 | The company billed IFM Company $6,208 for services performed. |
October 31 | The company paid $770 cash for Lyn Addie's wages for seven days' work. |
October 31 | The company paid a $3,300 cash dividend. |
November 1 | The company paid $220 cash for mileage expenses. |
November 2 | The company received $5,233 cash from Liu Corporation for computer services performed. |
November 5 | The company purchased computer supplies for $1,090 cash from Harris Office Products. |
November 8 | The company billed Gomez Company $6,468 for services performed. |
November 13 | The company agreed to perform future services for Alex's Engineering Company. No work has yet been performed. |
November 18 | The company received $3,008 cash from IFM Company as partial payment of the October 28 bill. |
November 22 | The company paid $160 cash for miscellaneous expenses. Hint: Debit Miscellaneous Expenses for $160. |
November 24 | The company completed work and sent a bill for $4,750 to Alex's Engineering Company. |
November 25 | The company sent another bill to IFM Company for the past-due amount of $3,200. |
November 28 | The company paid $264 cash for mileage expenses. |
November 30 | The company paid $1,540 cash for Lyn Addie's wages for 14 days' work. |
November 30 | The company paid a $1,700 cash dividend. |
Required: 1. Prepare journal entries to record each of the above transactions for Business Solutions. 2. Prepare ledger accounts (in balance column format) and post the journal entries from requirement 1 to them. 3. Prepare trial balance as of the end of November.
Related Book For
Fundamental Accounting Principles
ISBN: 978-0078110870
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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