P2-2 (you can complete using journal entry or T-account format)

Darlene Cook Company engaged in the following transactions during the month of

July:

July 1 Acquired land for $10,000. The company paid cash.

8. Billed customers for $3,000. This represents an increase in revenue. The customer has

been billed and will pay at a later date. An asset, accounts receivable, has been created.

12. Incurred a repair expense for repairs of $600. Darlene Cook Company agreed to pay in 60 days. This transaction involves an increase in accounts payable and repair expense.

15. Received a check for $500 from a customer who was previously billed. This is a reduction in accounts receivable.

20. Paid $300 for supplies. This was previously established as a liability, account payable. Paid wages in the amount 24. of $400. This was for work performed during July.

Required Record the transactions, using T-accounts.

P2-3 (you can complete using journal entry or T-account format)

Gaffney Company had these adjusting entry situations at the end of December.

1. On July 1, Gaffney Company paid $1,200 for a one-year insurance policy. The policy was for the period July 1 through June 30. The transaction was recorded as prepaid insurance and a reduction in cash.

2. On September 10, Gaffney Company purchased $500 of supplies for cash. The purchase was recorded as supplies. On December 31, it was determined that various supplies had been consumed in operations and that supplies costing $200 remained on hand.

3. Gaffney Company received $1,000 on December 1 for services to be performed in the following year. This was recorded on December 1 as an increase in cash and as revenue. As of December 31, this needs to be recognized as Unearned Revenue, a liability account.

4. As of December 31, interest charges of $200 have been incurred because of borrowed funds. Payment will not be made until February. A liability for the interest needs to be recognized, as does the interest expense.

5. As of December 31, a $500 liability for salaries needs to be recognized.

6. As of December 31, Gaffney Company had provided services in the amount of $400 for

Jones Company. An asset, Accounts Receivable, needs to be recognized along with the revenue.

Required Record the adjusting entries at December 31, using T-accounts.