(0) Drew and Aranda CPAs, LLP began business on January 1 and will prepare monthly financial reports. Record the following transactions and adjustments for the month of January using the template provided on the next page. You only need to provide the amounts, indicating any decreases in amount by using ( ). Transactions occurring during January: Drew and Aranda invested $15,000 cash to begin the business in exchange for common stock. On January 1, purchased a one-year business insurance policy for $8,400 cash. On January 1, purchased a company car for $42,000, using $5,000 as a cash down payment and borrowing the remaining balance. Billed customers $3,500 for services performed on January 15. Collected $1,500 from customers on their accounts billed on January 15. Declared and paid a $1,000 cash dividend. Prepare the necessary adjustments on January 31 for the following accounts and activities: The one-year insurance policy purchased on January 1. The truck is expected to last for 60 months and then sold for $6,000 residual value. Salaries of $800 have been earned by employees but not yet recorded as of January 31. Interest incurred on the car loan for January is $200 and has not yet been paid.

Balance Sheet Assets = Liabilities + Stockholders Equity

Income Statement

Cash Asset

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Noncash Assets

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Liabilities

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Contrib. Capital

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Earned Capital

Revenues

Expenses

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Net Income

Record bad debts expense

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