Show me the steps to records a T accounts for: prepQuiz $2$ Jessica's Widget Shop$-$Merchandising $(200$ points$)$

Jessica Brady operates a widget shop. The shop specializes in a selection of various

widget products. You have been hired as manager. Your duties include maintaining the

store's financial records. Here above is the post$-$closing trial balance accounts at the

end of the previous year. The following transactions occurred during January, of this

year.

Assets Amount Liabilities & Equity Amount

Cash $$100,000$ Accounts Payable $$22,000$

Accounts Receivable $35,000$ Notes Payable Short term $65,000$

Supplies $4,000$ Long Term Notes Payable $95,000$

Inventory $40,000$ Common Stock $30,000$

Equipment $200,000$ Additional Paid in Capital Common stock $20,000$

Accumulated Depreciation$-$Equipment $(40,000)$ Retained Earnings $195,000$

Vehicle $60,000$

Accumulated Depreciation$-$Vehicle $(12,000)$

Land $40,000$

Total Assets $$427,000$ Total Liabilities & Equity $$427,000$

Jessica Brady operates a widget shop. The shop specializes in a selection of various widget products. You have been hired as manager. Your duties include maintaining the store$$s financial records. Here above is the post$-$closing trial balance accounts at the end of the previous year. The following transactions occurred during January, of this year.

a$.$ Received cash of $$40,000$ and $$60,000$ for machinery in exchange for common stock.

Debit to common stock and credit to cash and machinery

Debit to common stock and credit to cash and

Debit to cash and machinery and credit to common stock

Debit to machinery and credit to cash and common stock

b$.$ Paid six months$$ rent for the store at $$5,000$ per month $($five months are prepaid$).$

Debit to rent expense and credit to cash

Debit to prepaid rent and credit to cash

Debit to prepaid rent and rent expense and credit to cash

Debit to cash and credit to rent expense

c$.$ Made a payment on inventory accounts payable balance of $$40,000$ from transaction c above within the discount period.

Debit to inventory and credit to accounts payable and cash

Debit to cash and credit to inventory and account payable

Debit to accounts payable and inventory and credit to cash

Debit to accounts payable and credit to inventory and cash

m$.$ Record Deprecation: Help$-$all assets have no salvage value. Estimated useful lives: computers$-3$ years; machinery$-7$ years; vehicle$-5$ years; and for the equipment$-15$ years. $($a$/$d$-$stands for accumulated depreciation$)$

Debit to depreciation expense and credit to a$/$d$-$computers, a$/$d$-$vehicle, a$/$d$-$machinery and a$/$d$-$equipment

Debit to depreciation expense and credit to accumulated depreciation

Debit to accumulated depreciation and credit to depreciation expense

Debit to depreciation expense and credit intangible assets

n$.$ Received a cash payment for widgets in advance of $$25,000.$ Will deliver it next month.

Debit to advanced payments and credit to widgets

Debit to cash and credit to widgets

Debit to cash and credit to unearned revenue

Debit to widgets and credit to unearned revenue

o$.$ Office supplies on hand at the end of month were $$3,000.$

Debit to supplies and credit to supplies expense

Debit to supplies expense and credit to cash

Debit to supplies expense and credit to supplies

Debit to supplies and credit to cash

REQUIRED:

$1.$ Create a journal entry for each transaction. I have provided $4$ hints for each transaction$-$One of them is the correct one!

$2.$Then post to T accounts. Start by setting up all the existing accounts $(12)$ above in a t account. Then open new accounts when needed. For example the first transaction adds furniture$-$a new asset so you will need a new t account for furniture.