Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Elaine Consulting incorporated on February 1, current year. The company engaged in the following transactions during its first month of operations. Feb. 1 Issued capital
Elaine Consulting incorporated on February 1, current year. The company engaged in the following transactions during its first month of operations.
Feb. | 1 | Issued capital stock in exchange for $800,000 cash. | |
Feb. | 5 | Borrowed $100,000 from the bank by issuing a note payable. | |
Feb. | 8 | Purchased land, building, and office equipment for $750,000. The value of the land was $150,000, the value of the building was $540,000, and the value of the office equipment was $60,000. The company paid $200,000 cash and issued a note payable for the balance. | |
Feb. | 11 | Purchased office supplies for $800 on account. The supplies will last for several months. | |
Feb. | 14 | Paid the local newspaper $500 for a full-page advertisement. The ad will appear in print on February 18. | |
Feb. | 20 | Several of the inkjet printer cartridges that Elaine purchased on February 11 were defective. The cartridges were returned and the office supply store reduced Elaines outstanding balance by $200. | |
Feb. | 22 | Performed consulting services for $14,000 cash. | |
Feb. | 24 | Billed clients $16,000. | |
Feb. | 25 | Paid salaries of $12,000. | |
Feb. | 28 | Paid the entire outstanding balance owed for office supplies purchased on February 11. |
A partial list of the account titles used by the company includes the following
Cash | Notes Payable |
Accounts Receivable | Accounts Payable |
Office Supplies | Capital Stock |
Land | Client Service Revenue |
Building | Advertising Expense |
Office Equipment | Salaries Expense |
a. Prepare journal entries for the above transactions.
b. Post each entry to the appropriate ledger accounts.
c. Prepare a trial balance dated February 28, current year. Assume accounts with zero balances are not included in the trial balance.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started