Chapter 3: Practice Problem #2 Directions: Please prepare journal entries for all transactions starting with March 1. Peaceful Existence, Inc. is a consulting company established by Lola Guthrie. On March 1, the company was started with a $450,000 investment by the owner in exchange for common stock. During the month of March, the company engaged in the following transactions: Mar 2, the company purchased $30,650 of office supplies on account from Staples. The office supplies are expected to last one-year. Mar 3, performed a consulting job and billed the customer $90,000. Mar 4, the company paid $225,000 for a two-year insurance policy. Mar 5, the company received $50,000 cash in advance to perform a consulting job on Mar 25th Mar 5, purchased $65,000 of office equipment by paying $5,000 cash and signing a note payable for the balance. Straight-line depreciation is used for the equipment, and the equipment is expected to last 5 years with zero salvage value. At the end of the month, the owner had the below adjustments: Mar 31, adjusted the office supplies account to reflect $25,000 of supplies on hand. Mar 31, adjusted the prepaid insurance account to reflect that one month's of insurance had expired. Mar 31, adjusted the unearned revenue account to reflect that the unearned revenue received on Mar 5th had been earned. Mar 31, recorded one-month depreciation on the equipment. Mar 31, is a Thursday and the employees are paid on Friday. The owner has five employees who are each paid $300 per day for a 5-day work week. In addition to the above adjusting journal entries, the company also recorded the following transactions: Mar 31, paid in full the amount due to Staples for the office supplies purchased on Mar 2. Mar 31, collected in full the amount due from the customer billed on Mar 3.