James Weicker, a mechanic, opened a mobile repair business on June 1, 2015. The following are selected transactions from the first month:
a. Transferred cash from a personal bank account to an account to be used for the business, $15,000.
b. Purchased a used van for $19,500, paying $5,000 in cash and giving a note payable for the remainder.
c. Purchased equipment on account, $1,450.
d. Paid cash for insurance for the following year, $800.
e. Paid cash to creditors on account, $1,450.
f. Received an invoice, due in July, for a new window on the van, $460.
g. Paid salary of assistant, $1,200.
h. Paid installment due on note payable, $250.
i. Paid gas and oil for the van, $400.
Instructions
1. Record the above transactions directly in the following T accounts, without journalizing: Cash; Prepaid Insurance; Automobiles; Equipment; Accounts Payable; Note Payable; James Weicker, Capital; Salary Expense; Automobile Expense. To the left of each amount entered in the accounts, place the appropriate letter to identify the transaction.
2. Determine account balances of the T accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance.
3. Prepare an unadjusted trial balance as at June 30, 2015.