Question

Problem 2-2A Preparing and posting journal entries; preparing a trial balance LO C3, C4, A1, P1, P2

Aracel Engineering completed the following transactions in the month of June.

1. Jenna Aracel, the owner, invested $200,000 cash, office equipment with a value of $5,400, and $60,000 of drafting equipment to launch the company.
2. The company purchased land worth $53,000 for an office by paying $9,200 cash and signing a long-term note payable for $43,800.
3. The company purchased a portable building with $58,000 cash and moved it onto the land acquired in b.
4. The company paid $4,700 cash for the premium on an 18-month insurance policy.
5. The company completed and delivered a set of plans for a client and collected $8,800 cash.
6. The company purchased $28,000 of additional drafting equipment by paying $11,400 cash and signing a long-term note payable for $16,600.
7. The company completed $17,500 of engineering services for a client. This amount is to be received in 30 days.
8. The company purchased $1,300 of additional office equipment on credit.
9. The company completed engineering services for $22,000 on credit.
10. The company received a bill for rent of equipment that was used on a recently completed job. The $1,475 rent cost must be paid within 30 days.
11. The company collected $6,000 cash in partial payment from the client described in transaction g.
12. The company paid $2,400 cash for wages to a drafting assistant.
13. The company paid $1,300 cash to settle the account payable created in transaction h.
14. The company paid $915 cash for minor maintenance of its drafting equipment.
15. Jenna Aracel withdrew $10,070 cash from the company for personal use.
16. The company paid $1,900 cash for wages to a drafting assistant.
17. The company paid $2,600 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

Transaction	Journal Entries	Dr. ($)	Cr. ($)
a	cash	200000
	office equipment	5400
	drafting equipment	60000
	To common stock		265400
b	land	53000
	To cash		9200
	To notes payable		43800
c	building	58000
	To cash		58000
d	prepaid insurance	4700
	To cash		4700
e	cash	8800
	To engineering fees		8800
f	drafting equipment	28000
	To cash		11400
	To notes payable		16600
g	accounts receivable	17500
	To engineering fees		17500
h	office equipment	1300
	To accounts payable		1300
i	accounts receivable	22000
	To engineering fees		22000
j	equipment rental expenses	1475
	To accounts payable		1475
k	cash	6000
	To accounts receivable		6000
l	wages expenses	2400
	To cash		2400
m	accounts payable	1300
	To cash		1300
n	repair expenses	915
	To cash		915
o	dividends	10070
	To cash		10070
p	wages expenses	1900
	To cash		1900
q	advertisement expenses	2600
	To cash		2600

Trial Balance
accounts	Dr. ($)	Cr. ($)
cash	112315
accounts receivable	33500
prepaid insurance	4700
office equipment	6700
drafting equipment	88000
building	58000
land	53000
common stock		265400
dividends	10070
accounts payable		1475
notes payable		60400
engineering fees earned		48300
wages expenses	4300
equipment rental expenses	1475
advertising expenses	2600
repairs expenses	915
totals	375575	375575

cash
transaction	Dr. ($)	Cr. ($)	balance
a	200000	0	200000
b	0	9200	190800
c	0	58000	132800
d	0	4700	128100
e	8800	0	136900
f	0	11400	125500
k	6000	0	131500
l	0	2400	129100
m	0	1300	127800
n	0	915	126885
o	0	10070	116815
p	0	1900	114915
q	0	2600	112315
accounts receivable
transaction	Dr. ($)	Cr. ($)	balance
g	17500	0	17500
i	22000	0	39500
k	0	6000	33500
prepaid insurance
transaction	Dr. ($)	Cr. ($)	balance
d	4700	0	4700
office equipment
transaction	Dr. ($)	Cr. ($)	balance
a	5400	0	5400
h	1300	0	6700
drafting equipment
transaction	Dr. ($)	Cr. ($)	balance
a	60000	0	60000
f	28000	0	88000
building
transaction	Dr. ($)	Cr. ($)	balance
c	58000	0	58000
land
transaction	Dr. ($)	Cr. ($)	balance
b	53000	0	53000
accounts payable
transaction	Dr. ($)	Cr. ($)	balance
h	0	1300	1300
j	0	1475	2775
m	1300	0	1475
notes payable
transaction	Dr. ($)	Cr. ($)	balance
b	0	43800	43800
f	0	16600	60400
common stock
transaction	Dr. ($)	Cr. ($)	balance
a	0	265400	265400
dividends
transaction	Dr. ($)	Cr. ($)	balance
o	10070	0	10070
engineering fees earned
transaction	Dr. ($)	Cr. ($)	balance
e	0	8800	8800
g	0	17500	26300
i	0	22000	48300
wages expenses
transaction	Dr. ($)	Cr. ($)	balance
l	2400	0	2400
p	1900	0	4300
equipment rental expenses
transaction	Dr. ($)	Cr. ($)	balance
j	1475	0	1475
advertising expenses
transaction	Dr. ($)	Cr. ($)	balance
q	2600	0	2600
repairs expenses
transaction	Dr. ($)	Cr. ($)	balance
n	915	0	915