ELIUD'S LEASING INC. . 16 - 9 A comprehensive accotinting cycle problem. on December 1, 20- Ellud Tortes organized a business called Ellud's Leasing Inc. for the purpose of operating an equipment rental yard. The new business was able to begin operations immediately by purchasing the assets and taking over the location of Rent-lt, an equipment rental compariy that was going out of business. liud's Leasing Inc. uses the following chart of accounts: Cash Eliud Torres, Capital 30 Account Receivable Eliud Torres, Drawing 35 Prepaid Rent Income Summary 36 Unexpired Insurance Rental Fees Earned 40 Office Supplies Salaries Expense Rental Equipment Maintenance Expense Accumulated Depreciation: Uenities Expensa Rental Equipment Rent Expense 63 Notes Payable Office Supplies Expense 64 Account Payable Depreciation Expense: Rental Interest Payable Equipment 65 Salaries Payable Interest Expense 66 Uneamed Rental Fees The company closes its accounts and prepares financial statements at the end of each month. During December, the company entered into the following transaction: Dec. 1 Ellud Torres deposited $150,000 cash in a bank account in the name of the business, Eliud's Leasing Mro.. Dec. 1 Pald $12,000 to Hernandez Realty as three months' advance rant on the rental yard and office formerly occupied by Rent-It. Deci i Purchased office supplies.on account from Sterling Office Co., $1,700. Payment duo. In 30 days. (These supplies are expected to last for several months; debit the Office Supplies assol account.) Dec. B Purchased for $180,000 all the equipment formerly owned by Rent-lt. Pald $80,000 cash and issued a offe-year note payable for $100,000, plus interest at the annual rate of 9%. Dec. 8 Received $11,000 cash from Lewis Construction Co, as advance payment on rental eqlpment 20 . Dec. 12 Dec. 15 Dec. 17 Dec. 21 Dec. 22 Pald salaries for the first two weeks in December, $3,500. Excluding the Lewis advance, equipment rental fees earned during the first 15 days of December amounted to $6,000, of which $5,300 was recelved in cash. Purchased on account from Rutland Movers, Ina, $400 In parts needed to repair a rental tractor. Payment is due in 10 days. Ellud's Leasing Inc. (Eliud Torres) was named, along with Jagne Landscaping and Collier Construction, as a co-defendant in a $25,000 lawsuit filed on behalf of Kevin Davenpart . Jagne Landscape had left the rented backhoe in a fenced construction site owned by collier Construction. After working hours on December 20, Davenport had backhoe, he fell and broke his arm. The extent of legal and financial responsibility for this accident, If any, cannot be determined at this time. (Note: This event does not require a Journal entry at this time, but may require disclosure In notes accompanying the statements.) Purchased a 12-month public liabllity insurance policy for $2,700. This policy protects the company against ilability for injuries and property damage caused by its equipment However, the policy goes into effect on January 1, and affords no coverage for the injuries sustained by Kevin Davenport on December 20. Collected $210 of the accounts receivable recorded on December 15. Rented a backhoe to Jagno Landscaping at a price of $200 per day, to be paid when the backhoe is retumed. Jagne Landscaping expects to keep the backhoe for about two or three weeks. Pald blweekly salaries, $3,500. Pald the account payable to Rutland Movers, Inc, $400. Ellud Torres-withdrew $2,000 cash from the business to pay the rent on his personal residence. Received a bil frorn Universal Utlites for the months of December, $270. Payrhent is due in 30 days. Equipment rental fees eamed during second half of December and received lin cash arhounted to $8,450. Dec. 23 Dec. 26 Dec. 26 Dec. 27 bec. 28 Dec. 29 1 Dec. 31 ELIUD'S LEASING INC. . 16 - 9 A comprehensive accotinting cycle problem. on December 1, 20- Ellud Tortes organized a business called Ellud's Leasing Inc. for the purpose of operating an equipment rental yard. The new business was able to begin operations immediately by purchasing the assets and taking over the location of Rent-lt, an equipment rental compariy that was going out of business. liud's Leasing Inc. uses the following chart of accounts: Cash Eliud Torres, Capital 30 Account Receivable Eliud Torres, Drawing 35 Prepaid Rent Income Summary 36 Unexpired Insurance Rental Fees Earned 40 Office Supplies Salaries Expense Rental Equipment Maintenance Expense Accumulated Depreciation: Uenities Expensa Rental Equipment Rent Expense 63 Notes Payable Office Supplies Expense 64 Account Payable Depreciation Expense: Rental Interest Payable Equipment 65 Salaries Payable Interest Expense 66 Uneamed Rental Fees The company closes its accounts and prepares financial statements at the end of each month. During December, the company entered into the following transaction: Dec. 1 Ellud Torres deposited $150,000 cash in a bank account in the name of the business, Eliud's Leasing Mro.. Dec. 1 Pald $12,000 to Hernandez Realty as three months' advance rant on the rental yard and office formerly occupied by Rent-It. Deci i Purchased office supplies.on account from Sterling Office Co., $1,700. Payment duo. In 30 days. (These supplies are expected to last for several months; debit the Office Supplies assol account.) Dec. B Purchased for $180,000 all the equipment formerly owned by Rent-lt. Pald $80,000 cash and issued a offe-year note payable for $100,000, plus interest at the annual rate of 9%. Dec. 8 Received $11,000 cash from Lewis Construction Co, as advance payment on rental eqlpment 20 . Dec. 12 Dec. 15 Dec. 17 Dec. 21 Dec. 22 Pald salaries for the first two weeks in December, $3,500. Excluding the Lewis advance, equipment rental fees earned during the first 15 days of December amounted to $6,000, of which $5,300 was recelved in cash. Purchased on account from Rutland Movers, Ina, $400 In parts needed to repair a rental tractor. Payment is due in 10 days. Ellud's Leasing Inc. (Eliud Torres) was named, along with Jagne Landscaping and Collier Construction, as a co-defendant in a $25,000 lawsuit filed on behalf of Kevin Davenpart . Jagne Landscape had left the rented backhoe in a fenced construction site owned by collier Construction. After working hours on December 20, Davenport had backhoe, he fell and broke his arm. The extent of legal and financial responsibility for this accident, If any, cannot be determined at this time. (Note: This event does not require a Journal entry at this time, but may require disclosure In notes accompanying the statements.) Purchased a 12-month public liabllity insurance policy for $2,700. This policy protects the company against ilability for injuries and property damage caused by its equipment However, the policy goes into effect on January 1, and affords no coverage for the injuries sustained by Kevin Davenport on December 20. Collected $210 of the accounts receivable recorded on December 15. Rented a backhoe to Jagno Landscaping at a price of $200 per day, to be paid when the backhoe is retumed. Jagne Landscaping expects to keep the backhoe for about two or three weeks. Pald blweekly salaries, $3,500. Pald the account payable to Rutland Movers, Inc, $400. Ellud Torres-withdrew $2,000 cash from the business to pay the rent on his personal residence. Received a bil frorn Universal Utlites for the months of December, $270. Payrhent is due in 30 days. Equipment rental fees eamed during second half of December and received lin cash arhounted to $8,450. Dec. 23 Dec. 26 Dec. 26 Dec. 27 bec. 28 Dec. 29 1 Dec. 31