Prepare journal entries to record basic business transaction and determine the balances of accounts using the t-account. Determine SFP using repost form.

Question

Evelyn Tria, Attorney-at-Law, opened her office on September 01, 2016. The following transactions were completed during the month:

a. Deposited 210,000.00 in the bank in the name of the business

b. Bought office equipment on account from Perdio Company, 147,000.00

c. Invested her personal law library into the business, 57,000.00

d. Paid office rent for the month, 7,600.00

e. Bought office supplies for cash 8,850.00

f. Paid the premium for one year fire insurance policy on the equipment and the library, 1,860.00

g. Received professional fees for services rendered, 24,600.00

h. Received and paid bill for the use of a landline, 2,280.00

i. Paid salary of two part-time legal researchers, 9,600.00

j. Paid car rental expense, 2,880.00

k. Received professional fees for services rendered 21, 200.00

l. Paid Perdio Company part payment on amount owed for the purchase of office equipment recorded earlier, 15,000.00

m. Perdio withdrew cash for personal use, 20,750.00

Answer 1

JOURNAL ENTRIES

(a)

Bank Dr. 210,000.00

To Owners Equity 210,000.00

(Being business started with Bank)

(b)

office equipment Dr. 147,000.00

To Account Payable 147,000.00

(Being office equipment purchased on credit)

(c)

Law Library Dr. 57,000.00

To Additional Owners Equity 57,000.00

(Being owner reinvested his personal asset into the business)

(d)

Office rent Dr. 7,600.00

To Cash 7,600.00

(Being office rent paid in cash)

(e)

Office Supplies Dr. 8,850.00

To Cash 8,850.00

(Being office supplies purchased in cash)

(f)

Prepaid insurance Premium Dr. 1,860.00

To Cash 1,860.00

(Being insurance premium paid on equipment and the library)

(g)

Cash Dr. 24,600.00

To Service Revenue 24,600.00

(Being cash received for services rendered)

(h)

Telephone Expenses Dr. 2,280.00

To Cash 2,280.00

(Being Telephone expenses paid in cash)

(i)

Salary Dr. 9,600.00

To Cash 9,600.00

(Being salary paid to legal researchers)

(j) Car Rental expense Dr. 2,880.00

To Cash 2,880.00

(Being Car rental expenses paid in cash)

(k)

Cash Dr. 21, 200.00

To Service Revenue 21, 200.00

(Being cash received for services rendered)

(l)

Account Payable Dr. 15,000.00

To Cash 15,000.00

(Being part payment made to Perdio Company )

(l)

Drawing Dr. 20,750.00

To Cash 20,750.00

(Being Perdio withdrew cash for personal use)