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For the past several years, Johnson has operated a part-time consulting business from his home. As of April 1, 2006, Johnson decided to move to

For the past several years, Johnson has operated a part-time consulting business from his home. As of April 1, 2006, Johnson decided to move to rented quarters and to operate the business, which was to be known as ABC Consulting, on a full-time basis. ABC Consulting entered into the following transactions during April:

Date

Transaction

April 1.

The following assets were received from Johnson: cash, $13,100; accounts receivable, $3,000; supplies, $1,400; and office equipment, $12,500.Thise were no liabilities received.

1

Paid three months rent on a lease rental contract, $4,800.

2

Paid the premiums on property and casualty insurance policies, $1,800.

4

Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $5,000.

5

Purchased additional office equipment on account from Office Station Co., $2,000.

6

Received cash from clients on account, $1,800.

10

Paid cash for a newspaper advertisement, $120.

12

Paid Office Station Co. for part of the debt incurred on April 5, $1,200.

12

Recorded services provided on account for the period April 112, $4,200.

14

Paid part-time receptionist for two weeks salary, $750.

17

Recorded cash from cash clients for fees earned during the period April 116, $6,250.

18

Paid cash for supplies, $800.

20

Recorded services provided on account for the period April 1320, $2,100.

24

Recorded cash from cash clients for fees earned for the period April 1724, $3,850.

26

Received cash from clients on account, $5,600.

27

Paid part-time receptionist for two weeks salary, $750.

29

Paid telephone bill for April, $130.

30

April 30. Paid electricity bill for April, $200.

30

Recorded cash from cash clients for fees earned for the period April 2530, $3,050.

30

Recorded services provided on account for the remainder of April, $1,500.

30

Johnson withdrew $6,000 for personal use.

Instructions

  1. Journalize each transaction in a two-column journal, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.)

Account

Account number

Account

Account number

Cash

11

Johnson Capital

31

Accounts Receivable

12

Johnson, Drawing

32

Supplies

14

Fees Earned

41

Prepaid Rent

15

Salary Expense

51

Prepaid Insurance

16

Rent Expense

52

Office Equipment

18

Supplies Expense

53

Accumulated Depreciation

19

Depreciation Expense

54

Accounts Payable

21

Insurance Expense

55

Salaries Payable

22

Miscellaneous Expense

59

Unearned Fees

23

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