mith AC Services opens for business and completes these transactions in April.
|April||1||John Smith, the owner, invests $38,000 cash along with office equipment valued at $15,000 in the company as company capital.|
|2||The company prepaid $9,000 cash for 12 months’ rent for office space.|
|4||The company made credit purchases for $8,000 in office equipment and $2,400 in office supplies. Payment is due within 10 days.|
|8||The company completed work for a client and immediately received $3,280 cash.|
|12||The company completed a $15,400 project for a client, who must pay within 30 days.|
|13||The company paid $10,400 cash to settle the payable created on September 4.|
|19||The company paid $1,900 cash for the premium on an 18-month insurance policy.|
|22||The company received $7,700 cash as partial payment for the work completed on September 12.|
|24||The company completed work for another client for $2,100 on credit.|
|28||The company paid John Smith $5,300 cash recorded as an owner withdrawal.|
|29||The company purchased $550 of additional office supplies on credit.|
|30||The company paid $860 cash for this month’s utility bill.|
- Prepare general journal entries to record these transactions using the accounts listed in Step 2.
- Open the following ledger accounts—their account numbers are in parentheses: Cash (101); Accounts Receivable (106); Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable (201); John Smith, Capital (307); John Smith, Withdrawals (319); Service Fees Earned (401); and Utilities Expense (690).
- Post journal entries from Step 1 to the ledger accounts and enter the balance after each posting.
- Prepare a trial balance as of the end of April.