On January 1, 2021 Sean and Maia formed a company called Hood Rental, Inc. for the purpose of operating an equipment rental yard. The new company was able to begin operations immediately by purchasing the assets and taking over the location of Rent-It, an equipment rental company that was going out of business.

Instructions:

1. Prepare the journal entries for the January
2. Post the entries to ledger accounts (using T accounts provided). Update T account balances.
3. Prepare the adjusting entries for a to f above.
4. Post the adjusting entries to the ledger accounts (using the same T accounts). Update T account balances.
5. Prepare the January Trial Balance.
6. Prepare the January financial statements (income statement, statement of retained earnings and the balance sheet.
7. Prepare the Closing Entries and post to the T accounts.

The company closes its accounts and prepares financial statements at the end of month. During January the company had the following transactions. Prepare the journal entries for January in the place provided.

January 1: Sean and Maia opened a business each contributing $85,000 cash to the company and receiving Capital Stock, no par, for their investment

January 1: Purchased equipment for $240,000. Paid $100,000 cash and issued a one-year note payable for the balance owed, plus interest at the annual rate of 6%.

January 1: Paid $33,600 to Santos Realty for one years advanced rent on the rental yard and office.

January 4: Received $14,000 cash from McBryan Construction Company for equipment rentals for January and February. McBryan will pick up the equipment on January 14^th.

January 8: Purchased office supplies on account from Modern Office Co., $1,800. Payment due in 30 days. (These supplies are expected to last for several months).

January 12: Paid salaries for the first two weeks in January, $8,600.

January 15: Excluding the McBryan advance, equipment rental fees earned during the first 15 days of January amounted to $24,500, of which $8,800 was received in cash.

January 23: Collected $11,200 of the accounts receivable recorded on January 15

January 26: Paid biweekly salaries, $8,300.

January 28: Paid a distribution of $1,500 to each of the owners.

January 31: Received a bill from Universal Utilities for the month of January, $470. Payment is due in 30 days.

January 31: Equipment rental fees earned during second half of January amounted to $21,200 of which $16,000 was on account and the remainder received in cash.