Journalize the following transactions and use the worksheet to prepare an Adjust

Question

Journalize the following transactions and use the worksheet to prepare an Adjusted Trial Balance. a)Started event business with $30,000 of personal investment and $20,000 loan from the bank. b)Purchased office furniture by paying $20,000 in notes, of which $5,000 is due the end year and $15,000 in next 4 years c)Paid $1,200 of liability insurance for 12 months (not expensed yet). d)Purchased $2,000 worth of event supplies on account, due by the end of next month. e)During the month, we hosted two events and generated revenues of $3,500 (cash) and $2,500 (on account) respectively. f)Paid monthly rent of $2,500 for the office space.

Explanation / Answer

Journal entries: S.no. Accounts title and explanations Debit $ Credit $ a. Cash Account Dr. 50000      Owner's capital 30000      Bank loan payable 20000 b. Furniture Account Dr. 20000      Notes payable 20000 c. Prepaid insurance Acccount Dr. 1200        Cash account 1200 d. Supplies Account Dr. 2000    Accounts payable 2000 e. Cash Account Dr. 3500 Accounts receivable Account Dr. 2500      Service revenue 6000 f. Rent expense Account Dr. 2500     Cash account 2500 Unadjusted Trial balance Debit Credit Cash Account 49800 Accounts receivable 2500 Supplies 2000 Prepaid insurance 1200 Furniture 20000 Accounts payable 2000 Notes payable 20000 Bank loan payable 20000 Owner's capital 30000 Service revenues 6000 Rent expense 2500 TOTAL 78000 78000

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