Question

 

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.

Answer 1

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