Question
Chart of Accounts Led ger Unadjusted Trial Balance Instructions For the past several years, Steffy Lopez has operated a part-time consulting business from his home. As of July 1, 2018, 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 Consulting entered into the following transactions during July: Jul. The following assets were received from Steffy Lopez in exchange for common stock: cash, $13,500; accounts receivable, $20,800; supplies, $3,200; and office equipment, $7,500. There were no liabilities received. 1 Paid two months' rent on a lease rental contract, $4,800. 2 Pald the annual premiums on property and casuaity 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 additionel 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 1-12, $13,300. 14 Paid receptionist for two weeks, salary, 1,750 / 11/27/20
Explanation / Answer
Solution:
1) Preparing the Journal Entries for Each Transaction:
Date General Journal Debit Credit July 1, 2018 Cash $13,500 Accounts Receivable $20,800 Supplies $3,200 Office Equipment $7,500 Steffy Lopez, Capital $45,000
July 1 Prepaid Rent $4,800 Cash $4,800
July 2 Prepaid Insurance $4,500 Cash $4,500
July 4 Cash $5,500 Unearned Fees $5,500
July 5 Office Equipment $6,500 Accounts Payable $6,500
July 6 Cash $15,300 Accounts Receivable $15,300
July 10 Miscellaneous Expense $400 Cash $400
July 12 Accounts Payable $5,200 Cash $5,200
July 12 Accounts Receivable $13,300 Cash $13,300
July 14 Salary Expense $1,750 Cash $1,750
July 17 Cash $9,450 Fees Earned $9,450
July 18 Supplies $600 Cash $600
July 20 Accounts Receivable $6,650 Fees Earned $6,650
July 24 Cash $4,000 Fees Earned $4,000
July 26 Cash $12,000 Accounts Receivable $12,000
July 27 Salary Expense $1,750 Cash $1,750
July 29 Miscellaneous Expense $325 Cash $325
July 31 Miscellaneous Expense $675 Cash $675
July 31 Cash $5,200 Fees Earned $5,200
July 31 Accounts Receivable $3,000 Fees Earned $3,000
July 31 Steffy Lopez, Drawing $12,500 Cash $12,500