You started your company with $100,000 that you raised by selling stock in Practice Makes

Perfect Inc. to your family and friends.

2. Knowing that you would need additional funds, you presented your business plan to the bank

and were able to get a $50,000 loan at 12%.

3. You purchased three pianos for $16,000 each, paying cash. You believe these pianos will last

four years before you replace them. You expect the salvage value to be zero.

4. You spent $2,000 on supplies (inventory), which you charged on account.

5. The newspaper bills you $500 for the advertisement you ran. You plan on paying the bill next

month.

6. Rent for the space you have leased is $1,000 a month, which you paid.

7. The first month you bill students $2,000 for lessons.

8. You pay your two part-time piano teachers $500 each at the end of the month.

9. One of your students paid the $200 invoice you sent earlier in the month.

10. You write the check for the interest owed for the month.

11. You adjust the supplies (inventory) account for $300 of sheet music that you gave to

students.

12. You record one month of depreciation on the pianos