Completing the accounting cycle from journal entries to postclosing trial balance with a worksheet On December 1, Zaray Avelino began an auto repair shop, Avelino’s Quality Automotive.

The following transactions occurred during December:

The business uses the following accounts: Cash; Accounts Receivable; Supplies;
Prepaid Insurance; Land; Equipment; Accumulated Depreciation—Equipment;
Accounts Payable; Utilities Payable; Interest Payable; Unearned Revenue; Notes Payable;
Avelino, Capital; Avelino, Withdrawals; Income Summary; Service Revenue;
Salaries Expense; Rent Expense; Utilities Expense; Advertising Expense;
Supplies Expense; Insurance Expense; Interest Expense; and Depreciation Expense—Equipment.
Adjustment data:

a. Supplies used during the month, \($1,000\).

b. Depreciation for the month, \($400\).

c. One month insurance has expired.

d. Accrued Interest Expense, \($100\).
Requirements 

1. Prepare the journal entries and post to the T-accounts.
2. Complete the worksheet for the month ended December 31, 2025.
3. Prepare the adjusting entries and post to the T-accounts.
4. Prepare the income statement, the statement of owner’s equity, and the classified balance sheet in report form.
5. Prepare the closing entries and post to the T-accounts.
6. Prepare a post-closing trial balance.

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Dec. 1 1 1 9 10 19 22 26 28 31 31 31 Avelino contributed $60,000 cash to the business in exchange for capital. Purchased $12,000 of equipment paying cash. Paid $2,000 for a four-month insurance policy starting on December 1. Paid $22,000 cash to purchase land to be used in operations. Purchased Supplies on account, $3,300. Borrowed $25,000 from the bank for business use. Avelino signed a notes payable to the bank in the name of the business. The note is due in five years. Paid $800 for advertising expenses. Paid $1,000 on account. The business received a bill for utilities to be paid in January, $320. Revenues earned during the month included $10,000 cash and $1,200 on account. Paid employees' salaries $2,100 and building rent $950. Record as a compound entry. The business received $2,400 for auto screening services to be performed next month. 31 Avelino withdrew cash of $3,000.