Binbutti Engineering, a sole proprietorship, completed the following transactions during July 2020, the third month of operations:

Required

1. Prepare journal entries to record the transactions. Use page 1 for the journal.

2. Set up the following general ledger accounts (use the balance column format or T-accounts), entering the balances brought forward from June 30, 2020: Cash (101) $26,000; Accounts Receivable (106) $3,000; Prepaid Insurance (128) $500; Office Equipment (163) $1,700; Drafting Equipment (167) $1,200; Building (173) $42,000; Land (183) $28,000; Accounts Payable (201) $1,740; Long-Term Notes Payable (251) $24,000; Bob Binbutti, Capital (301) $54,000; Bob Binbutti, Withdrawals (302) $1,000; Engineering Revenue (401) $29,600; Wages Expense (623) $4,000; Equipment Rental Expense (645) $1,000; Advertising Expense (655) $640; and Repairs Expense (684) $300.

3. Post the entries to the general ledger accounts and enter the balance after each posting.

4. Prepare a trial balance at July 31, 2020.

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Bob Binbutti, the owner, invested $300,000 cash, office equipment with a value of $12,000, and $90,000 of drafting equipment in the business. July Purchased land for an office. The land was worth $108,000, which was paid with $10,800 cash and a long-term note payable for $97,200. Purchased a portable building with $150,000 cash and moved it onto the land. Paid $12,000 cash for the premiums on two one-year insurance policies. Completed and delivered a set of plans for a client and collected $1,400 cash. Purchased additional drafting equipment for $45,000. Paid $21,000 cash and signed a long-term note payable for the $24,000 balance. Completed $4,000 of engineering services for a client. This amount is to be paid within 30 days. 10 Purchased $4,500 of additional office equipment on credit. 12 Completed engineering services for $7,000 on credit. Received a bill for rent on equipment that was used on a completed job. The $13,800 rent must be paid within 30 days. 15 16 Collected $400 from the client of July 10. Paid $12,000 wages to the drafting assistants. 17 19 22 Paid the account payable created on July 12. 25 Paid $1,350 cash for some repairs to an item of drafting equipment. Binbutti withdrew $800 cash from the business for personal use. Paid $12,000 wages to the drafting assistants. Paid $6,000 cash for advertising in the local newspaper during July. 26 30 31