Journal Entries and Trial Balance

Valley Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on July 31, 20Y7, follows:

Valley Realty
Unadjusted Trial Balance
July 31, 20Y7
	Account No.	Debit Balances	Credit Balances
Cash	11	52,500
Accounts Receivable	12	100,100
Prepaid Insurance	13	12,600
Office Supplies	14	2,800
Land	16
Accounts Payable	21		21,000
Unearned Rent	22
Notes Payable	23
Cindy Getman, Capital	31		87,500
Cindy Getman, Drawing	32	44,800
Fees Earned	41		591,500
Salary and Commission Expense	51	385,000
Rent Expense	52	49,000
Advertising Expense	53	32,200
Automobile Expense	54	15,750
Miscellaneous Expense	59	5,250
		700,000	700,000

The following business transactions were completed by Valley Realty during August 20Y7:

Aug. 1.	Purchased office supplies on account, $3,150.
2.	Paid rent on office for month, $7,200.
3.	Received cash from clients on account, $83,900.
5.	Paid insurance premiums, $12,000.
9.	Returned a portion of the office supplies purchased on August 1, receiving full credit for their cost, $400.
17.	Paid advertising expense, $8,000.
23.	Paid creditors on account, $13,750.

29.	Paid miscellaneous expenses, $1,700.
30.	Paid automobile expense (including rental charges for an automobile), $2,500.
31.	Discovered an error in computing a commission during July; received cash from the salesperson for the overpayment, $2,000.
31.	Paid salaries and commissions for the month, $53,000.
31.	Recorded revenue earned and billed to clients during the month, $183,500.
31.	Purchased land for a future building site for $75,000, paying $7,500 in cash and giving a note payable for the remainder.
31.	Withdrew cash for personal use, $1,000.
31.	Rented land purchased on August 31 to a local university for use as a parking lot during football season (September, October, and November); received advance payment of $5,000.

Required:

Use the attached spreadsheet to complete parts 1 and 3. Click on the Spreadsheet icon to open and save the Excel file to your computer. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem.

1. The August 1, 20Y7 balance of each account has been recorded in the appropriate balance column of the four-column account. The word Balance has been entered in the item section and a check mark () has been placed in the Posting Reference column.

2. Journalize and insert the posting reference for the transactions for August in a two-column journal beginning on Page 18. Journal entry explanations may be omitted. If an amount box does not require an entry, leave it blank.

General Journal				Page 18
Date	Description	Post. Ref.	Debit	Credit
20Y7
Aug. 1	Office Supplies
	Accounts Payable
Aug. 2	Rent Expense
	Cash
Aug. 3	Cash
	Accounts Receivable
Aug. 5	Prepaid Insurance
	Cash
Aug. 9	Accounts Payable
	Office Supplies
Aug. 17	Advertising Expense
	Cash
Aug. 23	Accounts Payable
	Cash

General Journal				Page 19
Date	Description	Post. Ref.	Debit	Credit
20Y7
Aug. 29	Miscellaneous Expense
	Cash
Aug. 30	Automobile Expense
	Cash
Aug. 31-Error	Cash
	Salary and Commission Expense
Salary	Salary and Commission Expense
	Cash
Revenue	Accounts Receivable
	Fees Earned
Land	Land
	Cash
	Notes Payable
Withdraw	Cindy Getman, Drawing
	Cash
Rent	Cash
	Unearned Rent