Question

Prepare journal entries：

Jan. 1         Sold 5,000 shares of capital stock for a total of $500,000 cash.

Jan. 2         Paid the premium of $12,000 on a 24-month insurance policy on all assets.

Jan. 3         Purchased land and a building for a total of $350,000 cash. The land is valued at $50,000, while the building is valued at $300,000 and is expected to have a useful life of 30 years.

Jan. 10          Purchased a computer network system for $36,000 cash. The expected useful life is 6 years.

Jan. 15          Paid $2,400 cash for a phone system that should have a 3-year useful life.

Jan. 16          Paid cash to acquire equipment and furniture for business purposes at a cost of $12,000. The expected useful life is 4 years.

Jan. 19          Purchased office supplies for $1,250 cash. (Use the asset account “Office Supplies” for such purchases.)

Jan. 24          Paid cash of $10,000 for binders, manuals, and workbooks for use in Sheldon's client programs. Sheldon's policy is to initially record these materials as an asset (Program Supplies) and to then expense the materials used for a particular training program when the program is completed.

Jan. 30          Paid wages of $1,800 and salaries of $3,600 for work performed during January.

Feb. 14         Completed the first client program for a fee of $9,500. The customer paid $2,500 of the fee that day, with the remainder billed on account. Program supplies used on the project had originally cost Sheldon $1,500.

Feb. 15         Paid wages of $2,400 in cash.

Feb. 19         Paid utilities for the month of January of $1,050 in cash.

Feb. 23         Purchased on account 30 specialized manuals as program supplies for use in computer training for a total of $1,800.

Feb. 28         Borrowed $45,000 from the bank on a 2-year note. The interest rate on the note is 6% per year (or 0.5% per month).

Mar. 1       Paid wages of $3,600 and salaries of $6,000.

Mar. 1       Completed on-site computer training for two customers: JKL Products, Inc., and Watson Company. Billed JKL $11,000 on account. The fee for Watson was $9,200, half of which Watson paid in cash with the remainder on account. Program supplies used for the two customers totaled $4,600.

Mar. 4       Purchased additional program supplies on account for a total of $3,600.

Mar. 13        Collected $16,600 on account from credit customers.

Mar. 15        Completed first all-day computer workshop for walk-in customers. Sales totaled $4,250, all in cash. Program supplies used for the workshop originally cost Sheldon $1,850.

Mar. 16        Billed Coastal Corporation $7,500 for on-site training completed on March 16. Program supplies for the training originally cost Sheldon $2,500.

Mar. 16        Paid wages of $3,700.

Mar. 17        Purchased office supplies of $750 on account.

Mar. 21        Paid $3,200 to suppliers for materials previously purchased on account.

Mar. 23        Paid utilities for the month of February of $1,800 in cash.

Mar. 26        Received a $2,000 cash advance from Watson Company for additional computer training to begin April 1, 2018.

Mar. 29        Collected $6,250 on account from credit customers.

Mar. 31        Purchased $3,600 of program supplies for cash.

Additional Data Determined at March 31, 2018:

Unpaid and unrecorded wages and salaries totaled $2,700 and $8,500, respectively.

Service revenue unrecorded and unbilled at March 31 amounted to $9,300. Program supplies associated with these services originally cost Sheldon $2,800.

Office supplies on hand at March 31 totaled $450.

Sheldon uses straight-line depreciation on all depreciable assets and assumes the assets will have no value at the end of their estimated useful lives. A full month's depreciation is taken for the month of purchase, regardless of which day of the month the purchase is made. For example, depreciation expense for the three months ended March 31, 2018, on the phone system is $200 (i.e., $2,400/3 years x 3/12 of a year). Land is not considered depreciable. You may use a single account (Depreciation Expense) to record all of the depreciation expense for the depreciable assets. Also, you may use a single account (Accumulated Depreciation) to record the effect of depreciation on total assets.

Sheldon must record accrued interest for one month on the $45,000 bank loan.

Sheldon estimates utilities used during March amounted to $1,800, although the bill has not yet been received.

Remember insurance that has expired.

Answer 1

Journal Entries
Date	Particulars	Debit	Credit
1/1/2018	Cash To Capital Stock (Being cash from shares issued)	500,000.00	500,000.00
2/1/2018	Insurance Premium      To Cash (being cash paid on insurance)	12,000.00	12,000.00
3/1/2018	Land	50,000.00
	Building	300,000.00
	To Cash		350,000.00
	(Being purchase of land and building)
10/1/2018	Computer	36,000.00
	To Cash		36,000.00
	(Being purchase of computer)
15-01-2018	Phone	2,400.00
	To Cash		2,400.00
	(Being purchase of Phone)
16-01-2018	Equipment & Furniture	12,000.00
	To Cash		12,000.00
	(Being Purchase of Equipment)
19-01-2018	Office Supplies	1,250.00
	To cash		1,250.00
	(Being Purchase of office supplies)
24-01-2018	Program supplies	10,000.00
	To Cash		10,000.00
	(Being purchase of program supplies)
30-01-2018	Wages	1,800.00
	Salaries	3,600.00
	To cash		5,400.00
	(Being salary and wages paid)
14-02-2018	Cash	2,500.00
	Accounts receivable	7,000.00
	To Service revenue		9,500.00
	(being revenue from service recorded)
14-02-2018	Cost of Supplies	1,500.00
	To Program supplies		1,500.00
	(Being program supplies expensed)
15-02-2018	Wages	2,400.00
	To cash		2,400.00
	(being wages paid)
19-02-2018	Utilities expense	1,050.00
	To cash		1,050.00
	(being utilities paid)
23-02-2018	Program supplies	1,800.00
	To Accounts payables		1,800.00
	(Being program supplies purchased on account)
28-02-2018	Cash	45,000.00
	To loan from bank		45,000.00
	(Being loan taken from bank at 6% P.a)
1/3/2018	Wages	3,600.00
	Salaries	6,000.00
	To cash		9,600.00
	(Being Wages and salary paid
1/3/2018	Accounts receivable (JKL)	11,000.00
	To service revenue		11,000.00
	(being on account service recorded)
1/3/2018	Cash	4,600.00
	To service revenue		4,600.00
	(Cash received for services)
1/3/2018	Accounts receivable (Watson)	4,600.00
	To service revenue		4,600.00
	(Cash received for services)
1/3/2018	Cost of Supplies	4,600.00
	To Program supplies		4,600.00
	(Being cost of supplies for program)
4/3/2018	Program supplies	3,600.00
	To Accounts payables		3,600.00
	(Being on account purchase of supplies)
13-03-2018	Cash	16,600.00
	To Accounts Receivable		16,600.00
	(Being cash collected from debtors))
15-03-2018	Cash	4,250.00
	To service revenue		4,250.00
	(Being Cash received for Program)
15-03-2018	Cost of Supplies	1,850.00
	To Program supplies		1,850.00
	(Being cost of supplies for program)
16-03-2018	Cash	7,500.00
	To Service revenue		7,500.00
	(Being Cash received for Program)
16-03-2018	Cost of Supplies	2,500.00
	To Program supplies		2,500.00
	(Being cost of supplies for program)
16-03-2018	Wages	3,700.00
	To cash		3,700.00
	(Being wages paid)
17-03-2018	Office supplies	750.00
	To Accounts payable		750.00
	(Being office supplies purchases)
21-03-2018	Accounts payable	3,200.00
	To Cash		3,200.00
	(being cash paid to suppliers)
23-03-2018	Utilities expense	1,800.00
	To Cash		1,800.00
	(being cash paid for utilities)
26-03-2018	Cash	2,000.00
	To Advance from customer		2,000.00
	(being advance received for training)
29-03-2018	Cash	6,250.00
	TO accounts receivable		6,250.00
	(Being Cash received form debtors)
31-03-2018	Program supplies	3,600.00
	TO cash		3,600.00
	(Being purchase of program supplies)
		1,082,300.00	1,082,300.00
	Additional Entries
31-03-2018	Salary	8,500.00
	To Salary Payable		8,500.00
	(Being Salary payable)
31-03-2018	Wages	2,700.00
	To Wages payable		2,700.00
	(being wages payable)
31-03-2018	Accounts receivable	9,300.00
	To Service revenue		9,300.00
	(Being service revenue accrued)
31-03-2018	Program supply expense	2,800.00
	To Program supply		2,800.00
	(Being program supply expense booked)
31-03-2018	Office supply expenses	1,550.00
	To Office supply		1,550.00
	(being office supply expense booked)
31-03-2018	Depreciation	4,950.00
	To accumulated depreciation		4,950.00
	(being depreciation charged for 3 months)
31-03-2018	Interest expense	225.00
	To Interest payable		225.00
	(being interest expense for 3 months)
31-03-2018	Utilities	1,800.00
	To Utility payable		1,800.00
	(being utility expense booked)
31-03-2018	Insurance expense	1,500.00
	To Interest insurance prepaid		1,500.00
	(being insurance expense booked)
		33,325.00	33,325.00