Journal Entries and Financial Statements Prepare the following journal entries and finish financial statements (Income statement and Balance sheet) HINT: For this exercise, you may want to start by drawing your T-Accounts, then, post the transactions to the appropriate T-Account. Keep in mind that to balance the equation you must post a debit on one side and a credit on the offsetting account, and vice-versa. Then proceed to write down your journal entries. As you work your postings, try to label your T-Accounts as Assets, Liabilities, Expenses, Income, or Equity Finally, Prepare your financial statements (Balance Sheet & Income Statement) with the ending balances. 1. Owner started a business by investing $20,000 in exchange for common stock. 2. Owner paid $6,000 (in advance) for 1 year of office rent. The first month's rent was taken immediately from the $6,000 dollars. 3. Paid the electricity bill for the month. Total bill was $75. 4. Paid the gas bill which was $50. 5. Bought a truck from Rudolph Chevrolet for deliveries around town. Total cost of the vehicle was $11,000 6. Bought a Dell computer for the office. He paid $1,200 for it 7. Got a loan for $60,000. He deposited the funds immediately to the business checking account. The note was for 5 years. 8. Hired 2 employees. One was a driver and the other was a warehouse clerk. Their first paycheck was (for both) $1,000 9. Purchased office supplies totaling $350. 10. Performed services for which he received a check for $900, the total bill for the services is $1,300. 11. He deposited a second check of $3,000 for delivering a shipment of compost to a local rancher. This client paid in full. 12. Paid $1,000 in wages for the second payroll of the month. ASSETS 100 110 120 130 140 150 $ $ $ $ $ $ TOTAL ASSETS $ LIABILITIES 200 $ TOTAL LIABILITIES $ EQUITY 500 NET INCOME $ TOTAL EQUITYS TOTAL LIABILITIES & EQUITY $ INCOME 400 TOTAL INCOME $ EXPENSES 300 310 320 330 $ $ $ TOTAL EXPENSES $ NET INCOME $