James Gray, an attorney, resigned from a position with a large law firm to establish his own law practice. The business transactions during September while the new venture was being organized are listed below.

Sept. 1 Gray opened a bank checking account in the name of the new firm, James Gray, Attorney at Law, by depositing $80,000.

Sept. 3 Purchased a small office building located on a large lot for a total price of

$160,000, of which $100,000 was applicable to the land and $60,000 to the

Instructions a Journalize the above transactions, then post to ledger accounts. Use the running balance form of ledger account. The account titles and the account numbers to be used are

Prepare a trial balance at September 30, 19 _

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building. A cash payment of $70,000 was made and a note payable was issued for the balance of purchase price. Sept. 7 Purchased a used calculating machine for $384, paying cash. Sept. 9 Purchased office furniture, filing cabinets, and a typewriter from Davidson Office Supply Co. at a cost of $3,960. A cash down payment of $720 was made, the balance to be paid in three equal installments due September 28, October 28, and November 28. The purchase was on open account and did not require signing of a promissory note. Sept. 10 A portion of the land purchased September 3 was sold for $36,000 to Doug- lass, Inc. The buyer made a down payment of $12,000 cash and agreed to pay the balance within 20 days. Since the land was sold at the same price per foot that Gray had paid for it, there was no gain or loss on the transac- tion. Sept. 28 Paid Davidson Office Supply Co. $1,080 cash as the first installment due on the account payable for office equipment. Sept. 30 Received $24,000 cash from Douglass, Inc., in full settlement of the ac- count receivable created in the transaction of September 10.