The Tax Preparation Blog

Question: I need URGENT help with Accounting…..PLEASE. Jouranl Entries and Trial Balance?

Oct. 1 Began business by making a deposit in a company bank account of $12,000, in exchange
for 1,200 shares of $10 par value common stock.

Oct. 1 Paid the premium on a one-year insurance policy, $1,200.

Oct. 1 Paid the current month’s rent, $1,040.

Oct. 3 Purchased repair equipment from Conklin Company, $4,400. The terms were $600 down and $200
per month for nineteen months. The first payment is due November 1.

Oct. 8 Purchased repair supplies from McKenna Company on credit, $390.

Oct. 12 Paid utility bill for October, $154.

Oct. 16 Cash bicycle repair revenue for the first half of October, $1,362.

Oct. 19 Made payment to McKenna Company, $200.

Adjusting entries:
a)1 mos insurance expired. b)Remaining inventory of repair supplies is $194 c)Estimated depreciation on repair equipment is $70 d)Estimated income taxes are $40

Answer: Oct 1
Cash $12,000 Dr
..Common Stock 12,000 Cr
….1,200 shares sold at $10 par value

Prepaid Insurance 1,200 Dr
..Cash1,200 Cr
….Premium payment for insurance coverage for the year

Rent Expense 1,040 Dr
..Cash Cr 1,040
….Rent for October

… etc.; remember that anything that DECREASES is a credit (CR) and anything that INCREASES is a debit (DR). So if you add cash, it’s a debit, and if you take away cash, it’s a credit. If you add to your expenses, it’s a debit. If you decrease the amount of an asset, it’s a credit.

Adjusting entries, Oct 31:
Insurance Expense 100 Dr
..Prepaid Insurance 100 Cr
….1 month insurance coverage

Here, you have an asset – something that you have paid for and is owed to your company (in this case, insurance coverage) which you are using up. The adjusting entry shows that you’ve ‘used’ one twelfth of your prepaid expense ($1200/12 = $100), so now it stops being an asset (something owed) and becomes an expense.

The Complete Idiot’s Guide to Accounting $6.99 Count on great sales for this one! The ideal beginner’s guide for bookkeepers, accounting clerks, and small business owners, as well as anyone interested in an accounting career, this covers everything from developing a chart of accounts to issuing financial statements. Topics include: € Developing a general ledger and maintaining journals € Reporting assets and expenses, handling receivables, …

Property for Industry posts steady 1Q profit

April 19 (BusinessWire) – Property for Industry, which has a portfolio of 55 industrial properties, reported little-changed first-half profit as rentals rose and the company took one-time adjustments for a drop in the value of interest rate swaps.

Related posts

• Sorry, no related posts at this time.