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BUS3061 Assignment
Imagine you are an accountant for J. Malone’s Law Firm, Inc. The accounts and transactions of the firm are listed below. Analyze each transaction. Identify the account or accounts to be debited and credited and prepare a journal entry for each in the proper format.
Here is an example to record the owner’s investment to start the business:
Cash: $54,000. Common stock: $54,000. Use the following account titles for this scenario:
Assets
Cash. Accounts receivable. Prepaid rent. Office equipment. Automobiles.
Liabilities
Accounts payable. Interest payable. Note payable.
Owner’s Equity
Common stock.
Expenses
Automobile expense. Rent expense. Utilities expense. Salaries expense. Interest expense. Telephone expense.
Revenues
Service revenue.
Transactions
Justin Malone:
1.
Invested $54,000 in cash to start the business.
2.
Paid $3,000 for 3 month’s rent.
3.
Bought a used automobile for the firm for $16,000 in cash.
4.
Performed services for $3,000 in cash.
5.
Paid $400 for automobile repairs.
6.
Performed legal services for $3,750 on credit.
7.
Borrowed $25,000 from the local bank to help expand his business.
8.
Purchased office chairs for $2,100 on credit.
9.
Received $1,800 from credit clients.
10.
Paid $1,000 on account to reduce the amount owed for the office chairs (purchased in item 8).
11.
Issued a check for $560 to pay the monthly utility bill. Purchased office equipment for $8,400.
12.
Paid half in cash; the remainder to be paid in 30 days.
13.
Issued a check for $5,680 to pay salaries.
14.
Performed legal services for $1,850 in cash.
15.
Performed legal services for $2,600 on credit.
16.
Collected $1,600 on accounts receivable from charge clients.
17.
One month’s worth of rent (paid in item 2) has expired.
18.
One month’s interest $145 accrued on the note payable (from item 7).
Required: Journal entries
