January 1 The owners invested $130,000 in exchange for common stock. 1. The company borrowed $15,000 from a local bank with a 6% note and a six-month term. Both the principal and interest will be repaid in six months. 1 The company purchased computer equipment for $16,800 cash. It should last seven years, with no residual value. 6 Supplies were purchased on account for $1,500. 8 Office rent of $600 for January was paid in cash. 20 The company received $3,000 from a customer for services to be performed in February. 31 Consulting services performed during January on account totaled $10,500. 31 The company paid salaries of $5,500 to employees. 31 The company paid $1,000 to the supplies vendor as part of the $1,500 owed to the vendor from the purchase on January 6. The company only paid part of the invoice because it only used $1,000 worth of the supplies in January. Requirement 1. Give the journal entry for each transaction. Provide the reason for each entry. Then, make the necessary adjusting entries at January 31, 2010. What else should be done to finish the accounting cycle for the month? Begin by giving the journal entry for each transaction. (Record debits first, then credits. Explanations will appear on the last line of the entry.) January 1: The owners invested $130,000 in exchange for common stock. Ref. Date Accounts and Explanation Debit Credit 1-1 Jan 1 January 1: The company borrowed $15,000 from a local bank with a 6% note and a six-month term. Both the principal and interest will be repaid in six months. January 1: The company borrowed $15,000 from a local bank with a 6% note and a six-month term. Both the principal and interest will be repaid in six months. Ref. Date L Accounts and Explanation Debit Credit Jan 1-2 January 1: The company purchased computer equipment for $16,800 cash. It should last seven years, with no residual value. Ref. Date Accounts and Explanation Debit Credit 1-3 Jan January 6: Supplies were purchased on account for $1,500. Ref. Date Accounts and Explanation Debit Credit 1-4 | Jan 60 January 8: Office rent of $600 for January was paid in cash. Ref. Date Accounts and Explanation 1-5 Jan Debit Credit January 20: The company received $3,000 from a customer for services to be performed in February. Ref. Date Accounts and Explanation Debit Credit 1-6 Jan 20 January 31: Consulting services performed during January on account totaled $10,500. Ref. Date Accounts and Explanation Debit Credit 1-7 Jan 31 January 31: The company paid salaries of $5,500 to employees. Date Accounts and Explanation Debit Credit Ref. 1-8 Jan 31 January 31: The company paid $1,000 to the supplies vendor as part of the $1,500 owed to the vendor from the purchase on January 6. The company only paid part of the invoice because it only used $1,000 worth of the supplies in January. Ref. Date Accounts and Explanation Debit Credit 1-9 Jan 31 Next, make the necessary adjusting entries at January 31, 2010. (Record debits first, then credits. Explanations will appear on the last line of the entry.) Begin by preparing the entry to adjust for supplies used during the month. Ref. Date Accounts and Explanation A-1 | Jan 31 Debit Credit Prepare the entry to record interest on the note payable. Ref. Date Accounts and Explanation A-2 || Jan 31 Debit Credit Prepare the entry to record depreciation expense for the month. Ref. Date Accounts and Explanation A-3 Jan 31 Debit Credit What else should be done to finish the accounting cycle for the month? Select the remaining steps, in the order in which they must be completed, to finish Master Minds Consulting's accounting cycle for the month of January. Remaining steps to complete the accounting cycle for January (1) (2) (4)
