Question 2

(10 marks)

Janes Technically Correct, a proprietorship, had a December 31 year end.

Required:

Record the initial and subsequent transaction for each of the following independent situations using the numerals to group the transaction:

1. June 01: Janes Technically Correct received $ 24,000 for a 12-month service contract.

December 31: A year-end adjusting journal entry is required to update the balance.

2. January 13: Janes Technically Correct did $ 10,000 software updates for a client. Payment will be received at the end of February.

February 28: A journal entry is required to record receipt of payment.

3. November 01: Janes Technically Correct purchased $ 7,000 office supplies on account.

December 31: Jane counted the office supplies and noted that there was $ 6,000 supplies on hand. Thus, the balance needs to be updated.

4. May 01: Because of additional job contracts, Janes Technically Correct leased a computer for $900, which represented a 5-month rental contract.

October 01: Janes Technically Correct needs to adjust the prepaid account.