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

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