Karen Noonan opened Kingbird Cleaning Services Inc. on February 1, 2025. During February, the following transactions were completed. Feb. 1 Issued 6,000 shares of Kingbird Cleaning Services common stock for $15,600. Each share has a $1.50 par. 1 Borrowed $9,600 on a 2-year, 6% note payable. 1 Paid $10,820 to purchase used floor and window cleaning equipment from a company going out of business ($5,780 was for the floor equipment and $5,040 for the window equipment). 1 Paid $236 for February Internet and phone services. 3 Purchased cleaning supplies for $1,180 on account. 4 Hired 4 employees. Each will be paid $580 per 5-day work week (Monday-Friday). Employees will begin working Monday, February 9. 5 5 16 17 Obtained insurance coverage for $8,700 per year. Coverage runs from February 1, 2025, through January 31, 2026. Karen paid $2,175 cash for the first quarter of coverage. Discussions with the insurance agent indicated that providing outside window cleaning services would cost too much to insure. Karen sold the window cleaning equipment for $4,740 cash. Billed customers $4,680 for cleaning services performed through February 13, 2025. Received $648 from a customer for 4 weeks of cleaning services to begin February 21, 2025. (By paying in advance, this customer received 10% off the normal weekly fee of $180.) 18 Paid $360 on amount owed on cleaning supplies. 20 Paid $3 per share to buy 360 shares of Kingbird Cleaning Services common stock from a shareholder who disagreed with management goals. The shares will be held as treasury shares. 23 Billed customers $5,160 for cleaning services performed through February 20. 24 Paid cash for employees' wages for 2 weeks (February 9-13 and 16-20). 25 Collected $3,000 cash from customers billed on February 16. (a) 27 Paid $236 for Internet and phone services for March. 28 Declared and paid a cash dividend of $0.20 per share. Your answer is correct. Journalize the February transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Feb. 1 Cash Common Stock Paid-in Capital in Excess of Par-Common Stock (To record issuance of common stock in excess of par) Feb. 1 Cash Notes Payable Debit 15600 9600 Credit 9000 6600 9600 Feb. 1 Feb. 1 Feb. 3 (To record issuance of notes payable) Equipment Cash (To record purchase of equipment) Utilities Expense Cash (To record payment of internet and phone services) Supplies Accounts Payable Feb. 4 No Entry No Entry Feb. 5 Prepaid Insurance Cash (To record payment of insurance) Feb. 5 Cash Loss on Disposal of Plant Assets 10820 236 1180 0 2175 4740 300 10820 236 1180 2175 Equipment (To record sale of equipment) Feb. 16 Accounts Receivable Service Revenue Feb. 17 Cash Unearned Service Revenue Feb. 18 Accounts Payable Cash Feb. 20 Treasury Stock Cash Feb. 23 Accounts Receivable Service Revenue 4680 648 360 1080 5160 Feb. 24 Salaries and Wages Expense 4640 Cash 5040 4680 648 360 1080 5160 4640 Feb. 25 Cash Feb. 27 Accounts Receivable Prepaid Expenses Cash 3000 236 Feb. 28 Cash Dividends 1128 Cash 3000 236 1128 Post to the ledger accounts. (Post entries in the order of journal entries presented above.) 2/1 Cash 15600 2/1 2/1 9600 2/1 2/5 4740 2/5 2/17 648 2/18 > 10820 236 2175 360 2/25 3000 2/20 1080 2/28 Bal. 12913 2/24 4640 2/27 236 2/28 1128 Accounts Receivable 2/16 4680 2/25 3000 2/23 5160 Supplies 2/3 1180 2/5 2/27 Prepaid Insurance 2175 Prepaid Expenses 236 2/28 Bal. 236 Equipment 2/1 10820 2/5 5040 2/18 Accounts Payable 360 2/3 1180 Notes Payable 2/1 9600 2/28 Unearned Service Revenue 2/17 Common Stock 2/1 Paid in Capital in Excess of Par-Common Stock 2/1 Cash Dividends 1128 Treasury Stock 2/20 1080 Service Revenue 648 9000 6600 2/16 4680 2/23 5160 2/1 2/24 2/5 Utilities Expense 236 Salaries and Wages Expense 4640 Loss on Disposal of Plant Assets 300 Prepare a trial balance at February 28, 2025. KINGBIRD CLEANING SERVICES INC. Trial Balance Cash Accounts Receivable Supplies Prepaid Insurance Prepaid Expenses Equipment Accounts Payable Notes Payable Unearned Service Revenue Common Stock Paid-in Capital in Excess of Par-Common Stock February 28, 2025 $ Debit 12913 6840 1180 2175 236 5780 SA Credit 820 9600 648 9000 6600 Cash Dividends Treasury Stock Service Revenue Utilities Expense Salaries and Wages Expense Loss on Disposal of Plant Assets Totals LA 1128 1080 236 4640 300 9840 36508 $ 36508 Journalize the following adjustments. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. Round answers to O decimal places, e.g. 1,527.) 1. Services performed for customers through February 27, 2025, but unbilled and uncollected were $4,500. 2. 3. 4. Received notice that a customer who was billed $240 for services performed February 10 has filed for bankruptcy. Kingbird Cleaning Services does not expect to collect any portion of this outstanding receivable. Kingbird Cleaning Services uses the allowance method to estimate bad debts. Kingbird Cleaning Services estimates that 3% of its month-end receivables will not be collected. Record 1 month of depreciation for the floor equipment. Use the straight-line method, an estimated life of 4 years, and $500 salvage value. 5. Record 1 month of insurance expense. 6. An inventory count shows $480 of supplies on hand at February 28. 7. One week of services were performed for the customer who paid in advance on February 17. 8. Accrue for wages owed through February 28, 2025. 9. Accrue for interest expense for 1 month. 10. Karen estimates a 20% income tax rate. (Hint: Prepare an income statement up to "income before taxes" to help with the income tax calculation.) No. Account Titles and Explanation 1. Accounts Receivable Service Revenue Debit 4,500 2. Allowance for Doubtful Accounts 240 Accounts Receivable 3. Bad Debt Expense Allowance for Doubtful Accounts 4. Depreciation Expense Accumulated Depreciation-Equipment 5. Insurance Expense Prepaid Insurance 6. Supplies Expense Supplies 573 110 725 700 7. Unearned Service Revenue 162 Service Revenue Credit 4,500 240 573 110 725 700 162 8. Salaries and Wages Expense Salaries and Wages Payable 9. Interest Expense Interest Payable 10. Income Tax Expense Income Taxes Payable 2,320 48 970 2,320 48 970 Post adjusting entries to the T-accounts. (Post entries in the order of journal entries presented above.) Cash 2/1 15,600 2/1 10,820 2/1 9,600 2/1 236 2/5 4,740 2/5 2,175 2/17 648 2/18 360 2/25 3,000 2/20 1,080 2/24 4,640 2/27 236 2/28 1,128 2/28 Bal. 12,913 2/16 2/23 2/27 2/28 Bal. 2/3 Accounts Receivable 4,680 2/25 3,000 5,160 2/16 240 4500 14340 Supplies 1,180 580 2/5 Prepaid Insurance 2,175 1450 2/27 Prepaid Expenses 236 700 725 2/1 Allowance for Doubtful Accounts 573 Equipment 10,820 2/5 Accumulated Depreciation - Equipment 110 110 2/18 Accounts Payable 360 2/3 Notes Payable 2/1 5,040 1,180 9,600 Salaries and Wages Payable Interest Payable Income Taxes Payable Unearned Service Revenue 500 2/17 Common Stock 2/1 1200 1200 150 150 3000 3000 648 148 9,000 Paid in Capital in Excess of Par-Common Stock 2/1 2/28 2/20 Cash Dividends 1,128 Treasury Stock 1,080 Service Revenue 6,600 500 2/16 4,680 2/23 2/1 Utilities Expense 236 5,160 500 2/24 Salaries and Wages Expense 4,640 3440 Insurance Expense 725 Depreciation Expense Bad Debt Expense Supplies Expense 600 Interest Expense 150 2/5 Loss on Disposal of Plant Assets 300 1200 573 Income Tax Expense 3000