MBA 600 Recording Income Statement Transactions Practice Problem Record the following transactions for the month of August, 2011, in the matrix below, for Structures, Inc., a small consulting engineering firm. August was the first month of business so there are no beginning balances. Summary Transactions 1 Borrowed $100,000 from the bank for start-up working capital. 2 Invested $20,000 of savings in the business in exchange for 100 percent of the stock in Structures, Inc. 3 Billed clients $10,000 for work performed during the month 4 Collected $8,000 from clients on account. 5 Paid salary expense of $2,000. 6 Paid office rental expense of $750 7 Purchased a one-year liability insurance policy for $1,200 cash (an asset) 8 Purchased a new computer for $8,000. Paid $2,000 in cash, the balance on account. 9 Received the telephone bill, $200, which will be paid in September. 10 Paid the utility bill, $50. 11 Received a $5,000 payment from client as a retainer for work to be performed in the future. The cash receipt was recorded as a liability. Adjusting Journal Entries 12 Due to the passage of time one month of the twelve month insurance policy has expired. 13 Performed 20% of the work requested by the client in transaction 11 Prepare the necessary closing entries