Question

Create a journal entry, t account and trial balanceMaquoketa Services was formed on May 1, 2017. The following transactions took place during the first month.
Transactions on May 1:1. Jay BradFord invested $40,000 cash in the company, as its sole owner.2. Hired two employees to work in the warehouse. They will each be paid a salary of $2,500 per month.3. Signed a 2-year rental agreement on a warehouse; paid $24,000 cash in advance for the first year.4. Purchased furniture and equipment costing $33,000. A cash payment of $12,000 was made immediately; the remainder will be paid in 6 months.5. Paid $1,600 cash for a one-year insurance policy on the furniture and equipment.Transactions during the remainder of the month:6. Purchased basic office supplies for $600 cash.7. Purchased more office supplies for $1,600 on account.8. Total revenues earned were $21,000—$8,000 cash and $13,000 on account.9. Paid $400 to suppliers for accounts payable due.10. Received $2,800 from customers in payment of accounts receivable.11. Received utility bills in the amount of $400, to be paid next month.12. Paid the monthly salaries of the two employees, totaling $5,000.

Answer 1

Answer:

Total balance of debit in trial balance = Total balance of credit in trial balance

Explanation:

                                             Maquoketa service

                                                  Journal entry

1. Dr Cash  40000

     Cr   Capital- Jayford   40000

  (Investment in company)

2. Dr Salary expense  5000

       Cr Salary payable        5000

   (Salary expense for the m/o of may-2017 @$2500 each)

3. Dr prepaid rent   24000

       Cr  Cash                24000

  ( Paid advance rent for warehouse)

4. Dr Furniture and equipment 33000

         Cr    Cash                                      12000

         Cr    Accounts payable                21000

     (Purchase furniture and equipment on cash and on account)

5.  Dr Prepaid insurance   1600

           Cr   Cash                        1600

      ( Purchase one year insurance policy of furniture ad equipment)

6. Dr office supplies    600

          Cr   Cash                600

     (Purchase basic office supplies)

7. Dr Office supplies  1600

        Cr  Accounts payable    1600

    ( Purchase office supplies on account)

8. Dr  Cash                         8000

     Dr Account receivable  13000

       Cr      Sales revenue              21000

   ( Revenue earned on cash and on account)

9. Dr Accounts payable  400

         Cr  Cash                      400

   ( Paid cash to supplier)

10. Dr Cash        2800

          Cr  Account receivable    2800

    ( Received cash from customer which was due)

11. Dr Utilities expense   400

        Cr utilities payable       400

    ( utility expense for the month)

12. Dr Salary payable   5000

          Cr  Cash       5000

     (Paid salary of 2 employee).

     

                                              Maquoketa service

                                                  T-account

       Cash                                                    Capital - Jayford

Dr___________Cr____                           DR   ___________CR

  40000    ---- 24000                                                  ----- 40000

               ---- 12000

               ---  1600

               ---  600

  8000    --- 400

  2800  ---  5000

    Salary expense                                             Salary payable

Dr____________Cr______                       DR    ___________Cr

  5000             ----                                          5000            ------5000

   Prepaid rent                                             Furniture and equipment

Dr ____________Cr____                        Dr        _____________Cr

  24000   ------                                          33000           --------

  Accounts payable                                         Prepaid insurance

Dr_____________Cr___                               Dr        ___________Cr_

           -------21000                                             1600            -----

            ------ 1600

   400        -----  

  Office supplies                                           Account receivable

Dr_____________Cr___                            Dr ______________Cr

      600     -----                                                13000             ------

   1600                                                                       -----    2800

  Utilities expense                                            Utilities payable

Dr____________Cr___                                     Dr   __________Cr__

   400         ------                                                                 -------400

  Sales revenue                                            

Dr_______________Cr                                        __________________

            ------21000                                                                 -------

                                      Maquoketa  Services

                                             Trial Balance

  Cash       7200                                                         40000  Capital-Jayford

  Salary expense  5000                                                       Salary payable

  Prepaid rent   24000                                           22200    Account payable

  Furniture and Equipment 33000                        400 Utilities payable

  Prepaid insurance   1600                                     21000    Sales revenue

  office supplies      2200                

   Account receivable  10200                

    utilities expense   400

 

Total Debits   83600                                  =    83600                Total credits