Question

In: Accounting

a. Make the necessary journal entries for the following transactions:

 

a. Make the necessary journal entries for the following transactions:

i. On 1 April 2020, Mr Syed has invested $20,000 cash to set up a restaurant business called Nasi Kandar Penang.

ii. On 2 April 2020 Nasi Kandar restaurant purchased cooking utensils costing $8,000 by signing a 2-month, 12%, $8,000 note payable.

iii. On 8 April the restaurant received $3,000 cash from a client as a down payment for an event that is expected to be held on 15 May 2020.

iv. On 9 April Mr Syed paid rental for the business premise for the month of April, $1,000.

v. On the same day, Mr Syed paid $1,200 for a one-year business insurance policy which will expire on 10 March 2021.

b. Post each of the above entry to the respective accounts in the general=al ledger.

c. Prepare a trial balance at 30 April 2020.

Solutions

Expert Solution

a.

Date Account Titles Debit Credit
Apr-01 Cash $           20,000
      Mr Syed, Capital $            20,000
Apr-02 Cooking Utensils $              8,000
      Notes Payable $              8,000
Apr-08 Cash $              3,000
      Unearned Revenue $              3,000
Apr-09 Rent Expense / Prepaid Rent $              1,000
     Cash $              1,000
Apr-09 Prepaid Insurance $              1,200
     Cash $              1,200

b.

Cash
Apr-01 $           20,000 $              1,000 Apr-09
Apr-08 $              3,000 $              1,200 Apr-09
End Bal $           20,800
Cooking Utensils
Apr-02 $              8,000
End Bal $              8,000
Prepaid Insurance
Apr-09 $              1,200
End Bal $              1,200
Notes Payable
$              8,000 Apr-02
$              8,000 End Bal
Unearned Revenue
$              3,000 Apr-02
$              3,000 End Bal
Mr Syed, Capital
$            20,000 Apr-01
$            20,000 End Bal
Rent Expense / Prepaid Rent
Apr-09 $              1,000
End Bal $              1,000

c. Trial Balance

Account Titles Debit Credit
Cash $           20,800
Prepaid Insurance $              1,200
Cooking Utensils $              8,000
Notes Payable $              8,000
Unearned Revenue $              3,000
Mr Syed, Capital $            20,000
Rent Expense $              1,000
Totals $           31,000 $            31,000

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