Question

Jenna Aracel, the owner, invested $180,000 cash, office equipment with a value of $7,000, and $70,000 of drafting equipment to launch the company. The company purchased land worth $55,000 for an office by paying $7,100 cash and signing a long-term note payable for $47,900. The company purchased a portable building with $55,000 cash and moved it onto the land acquired in b. The company paid $4,300 cash for the premium on an 18-month insurance policy. The company completed and delivered a set of plans for a client and collected $7,600 cash. The company purchased $21,000 of additional drafting equipment by paying $9,500 cash and signing a long-term note payable for $11,500. The company completed $16,500 of engineering services for a client. This amount is to be received in 30 days. The company purchased $1,900 of additional office equipment on credit. The company completed engineering services for $26,000 on credit. The company received a bill for rent of equipment that was used on a recently completed job. The $1,449 rent cost must be paid within 30 days. The company collected $7,000 cash in partial payment from the client described in transaction g. The company paid $2,400 cash for wages to a drafting assistant. The company paid $1,900 cash to settle the account payable created in transaction h. The company paid $975 cash for minor maintenance of its drafting equipment. Jenna Aracel withdrew $10,890 cash from the company for personal use. The company paid $1,300 cash for wages to a drafting assistant. The company paid $3,200 cash for advertisements on the Web during June.Required: 1. Prepare general journal entries to record these transactions using the following titles: Cash (101); Accounts Receivable (106); Prepaid Insurance (108); Office Equipment (163); Drafting Equipment (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); J. Aracel, Capital (301); J. Aracel, Withdrawals (302); Engineering Fees Earned (402); Wages Expense (601); Equipment Rental Expense (602); Advertising Expense (603); and Repairs Expense (604). 2. Post the journal entries from part 1 to the ledger accounts. 3. Prepare a trial balance as of the end of June.

Answer 1

In the Books of Jenna Aracel

Journal Entries

Date	Account Title	Debit	Credit
1	Cash	$180,000
	Office Equipment	$7,000
	Drafting Equipment	$70,000
	Aracel Capital		$257,000
	(Being Company started with initial capital with cash,office equipment & drafting equipment )
2	Land	$55,000
	Cash		$7,100
	Notes payable		$47,900
	( Being land purchased partially with cash & balance in Note payable )
3	Building	$55,000
	Cash		$55,000
	( Being portable building purchased for cash )
4	Prepaid Insurance	$4,300
	cash		$4,300
	( Being cash paid for 18 months insurance policy )
5	Cash	$7,600
	Engineering Fees Earned		$7,600
	( Being set of plans completed & delivered to client for cash )
6	Drafting Equipment	$21,000
	Cash		$9,500
	Long Term Note payable		$11,500
	( Being drafting equipment purchased partially for cash & Note payable )
7	Account receivable	$16,500
	Engineering Fees Earned		$16,500
	( Being Company completed engineering services for client )
8	Office Equipment	$1,900
	Account payable		$1,900
	( Being office equipment purchased on credit )
9	Account receivable	$26,000
	Enginerring Fees Earned		$26,000
	( Being Company completed engineering services for client )
10	Equipment Rental Expenses	$1,449
	Account payable		$1,449
	( Being rent of equipment payable )
11	Cash	$7,000
	Account Receivable		$7,000
	( Being cash received from the client for services rendered )
12	Drafting Wages	$2,400
	Cash		$2,400
	( Being wages paid to drafting assistant in cash )
13	Account payable	$1,900
	cash		$1,900
	( Being cash paid to settle the account payable )
14	Repairs & maintainance	$975
	Cash		$975
	( Being cash paid for repairs & maintainance of eqipnment )
15	Drafting Wages	$1,300
	Cash		$1,300
	( Being wages paid to drafting assistant in cash )
16	Aracel Withdrawals	$10,890
	cash		$10,890
	( Being cash taken for personal use )
17	Advertisement Expenses	$3,200
	Cash		$3,200
	( Being cash paid for advertising expenses )

Trial Balance as on 30 Th June

Particulars	Debit	Credit
Cash	$98,035
Office Equipment	$8,900
Notes payable		$47,900
Land	$55,000
Prepaid Insurance	$4,300
Account Receivable	$35,500
Drafting equipment	$91,000
Aracel Capital		$257,000
Account payable		$1,449
Accrued wages
Building	$55,000
Long term Note Payable		$11,500
Enginerring Fees earned		$50,100
Drafting wages	$3,700
Advertisement Expenses	$3,200
Drawings	10890
Repairs & maintainance	$975
Equipment Rental Expenses	$1,449
	$367,949	$367,949

Feel Free to reach or comment back if you need further clarity or something is missing

Drafting Wages Date Date Particulars Cash Cash Particulars Balance c/d Amount $3,700 Amount $2,400 $1,300 $3,700 $3,700 Advertisement Expenses Date Particulars Cash Amount Date $3,200 $3,200 Particulars Balance c/d Amount $3,200 $3,200 Equipment Rental Expenses Date Particulars Account payable Amount Date $1,449 $1,449 Particulars Balance c/d Amount $1,449 $1,449 Repairs & Maintaince Date Date Particulars Cash Amount $975 $975 Particulars Balance c/d Amount $975 $975 Aracel Withdrawals Date Amount Particulars Cash Date Particulars 10890 Balance cd 10890 Amount 10890 10890

Office Equipment Date Date Particulars Capital Account payable Particulars Balance c/d Amount $8,900 Amount $7,000 $1,900 $8,900 $8,900 Drafting Equipment Date Particulars Balance c/d Amount $91,000 Particulars Amount Date Aracel Capital $70,000 Cash $9,500 Long Term Note payable $11,500 $91,000 $91,000 Long Term Note payable Date Date Particulars Balance c/d Amount $11,500 $11,500 Particulars Amount Drafting Equipment $11,500 $11,500 Account Receivable Date Particulars Enginerring Fees earned Enginerring Fees earned Amount Date $16,500 $26,000 $42,500 Particulars Cash Balance c/d Amount $7,000 35500 $42,500

Engineering Fees Earned Date Date Particulars Particulars Balance c/d Amount $50,100 Cash Account Receivable Account Receivable Amount $7,600 $16,500 $26,000 $50,100 $50,100

Cash Date Particulars Capital Enginerring Fees earned Account receivable Amount Date $180,000 $7,600 $7,000 Particulars Land Portable Building Prepaid Insurance Drafting equipment Drafting wages Account payable Repairs & Maintaince Drafting wages Aracel withdrawals Advertisemnt Expenses Balance c/d Amount $7,100 $55,000 $4,300 $9,500 $2,400 $1,900 $975 $1,300 $10,890 $3,200 $98,035 $194,600 $194,600 Notes payable Date Date Particulars Balance c/d Amount $47,900 Particulars Land Amount $47,900 $47,900 $47,900 Account payable Date Date Particulars Cash Balance c/d Amount $1,900 $1,449 Particulars Office Equipment Equipment Rental expenses Amount $1,900 $1,449 $3,349 $3,349

Aracel Capital Date Date Particulars Balance c/d Amount $257,000 Particulars Amount Cash $180,000 Office Equipment $7,000 Drafting Equipment $70,000 $257,000 $257,000 Land Date Particulars Date Particulars Balance c/d Amount $55,000 Cash Notes payable Amount $7,100 $47,900 $55,000 $55,000 Building Date Particulars Amount Date $55,000 $55,000 Particulars Balance d/d Cash Amount $55,000 $55,000 Prepaid Insurance Date Date Particulars Cash Amount $4,300 $4,300 Particulars Balance c/d Amount $4,300 $4,300