Applying the accounting cycle On April 1, 2008, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company’s first month.
April 1. Nozomi invested \($30,000\) cash and computer equipment worth \($20,000\) in the business.
2. Rented furnished office space by paying \($1,800\) cash for the first month’s (April) rent. (Adventure Travel debited Rent Expense for this payment.)
3. Purchased \($1,000\) of office supplies for cash.
10. Paid \($2,400\) cash for the premium on a 12-month insurance policy. Coverage begins on April 11 14. Paid \($1,600\) cash for two weeks’ salaries earned by employees.
24. Collected \($8,000\) cash on commissions from airlines on tickets obtained for customers.
26.Paid another \($1,600\) cash for two weeks’ salaries earned by employees.
27. Paid \($350\) cash for minor repairs to the company’s computer.
27. Paid \($750\) cash for this month’s telephone bill.
28. Nozomi withdrew \($1,500\) cash for personal use.

The company’s chart of accounts follows:

Required 

1. Use the balance column format to set up each ledger account listed in its chart of accounts.
2. Prepare journal entries to record the transactions for April and post them to the ledger accounts. The company records prepaid and unearned items in balance sheet accounts.
3. Prepare an unadjusted trial balance as of April 30.
4. Use the following information to journalize and post adjusting entries for the month:

a. Two-thirds of one month’s insurance coverage has expired.

b. At the end of the month, \($600\) of office supplies are still available.

c. This month’s depreciation on the computer equipment is \($500.\)

d. Employees earned \($420\) of unpaid and unrecorded salaries as of month-end.
5. Prepare the income statement and the statement of owner’s equity for the month of April and the balance sheet at April 30, 2008.
6. Prepare journal entries to close the temporary accounts and post these entries to the ledger.
7. Prepare a post-closing trial balance.

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101 Cash 106 Accounts Receivable 612 124 Office Supplies 622 128 Prepaid Insurance 637 405 Commissions Earned Depreciation Expense-Computer Equip. Salaries Expense Insurance Expense 167 Computer Equipment 640 Rent Expense 168 Accumulated Depreciation-Computer Equip. 650 Office Supplies Expense 209 Salaries Payable 684 Repairs Expense 301 J. Nozomi, Capital 302 J. Nozomi, Withdrawals 10 688 901 Income Summary Telephone Expense