Question

Record the transactions noted below in the General Journal

TRANSACTIONS:

Date                                       Transaction

January 1              Owner, Tom Ford, invested $260,000 cash along with office equipment that had a $90,000 market value in exchange for 35,000 shares of $10 par value common stock in Celebrity Consultants, Inc.

January 1              Purchased land and an office building for $140,000, of which $20,000 was attributable to the fair market value of the land. A $50,000 cash down payment was made and a 5% five-year note was signed for the balance. Interest and 20% of the principal will be paid annually on this date. (Assume a 360-day year for interest computation purposes.)

January 1              Purchased a one-year insurance policy, effective January 1, for $2,400.

January 3              Purchased office supplies of $3,600 on account from Office Depot.

January 5              Established a petty cash fund of $400.

January 7              Placed an order with the LA Times newspaper for advertising, which will run during January, February, and March. The advertising, which cost $1,800, was paid for on this date in order to obtain a lower price.

January 10            Completed consulting job for Brad Pitt, and billed him total of $12,000, due in 30 days.

January 12            Completed consulting job totaling $18,500 for Beyonce’ Knowles, and collected $10,000 cash with the balance due in 30 days.

January 15            Paid the semi-monthly payroll, which totaled $8,000, to the firm’s workers, all of which are classified as independent contractors.

January 18            Received $15,000 from Tiger Woods for 6 month’s consulting services to begin February 1.

January 19            Paid Office Depot $2,500 on the account balance.

January 20            Received $8,000 from Brad Pitt for services billed January 10^th.

January 24            Completed $5,000 consulting job for Taylor Swift and received full cash payment.

January 25            Received $4,000 from Beyonce’ Knowles for consulting services completed January 12.

January 30            Received the January telephone bill from AT&T for $375, due Feb 15.

January 31            Paid the payroll to firm’s workers for the second half of January.

January 31            Received utility bills for January due Feb 16, from SWEPCO for $360 & L.A. Water Utilities for $280.

January 31            An audit of the petty cash fund determined the following:

                                                Receipts:               Postage                                  $ 24

                                                                                Office supplies                     38

                                                                                Misc. Exp.                             22

                                                                Currency and Coin                             313

Reimburse Petty Cash and record the entry from the information above.

January 31            Declared & paid cash dividend of $.10 per share to the shareholders of record on January 31.

SUPPLEMENTAL ADJUSTING ENTRY INFORMATION:

a. An inventory of office supplies was taken on January 31 & found that $2,100 of supplies remained on hand.

b. An invoice of $280 for repair of office equipment dated January 26 had not yet been recorded.

c. The building will be depreciated on a straight-line basis over 30 years with no salvage value.

d. The equipment will be depreciated on a straight-line basis over 10 years with no salvage value.

e. Review accounts for other adjustments necessary at January 31 in addition to those indicated in items a - d.

CHART OF ACCOUNTS:

Cash, Petty Cash, Accounts Receivable, Office Supplies, Prepaid Insurance, Prepaid Advertising, Office Equipment Accumulated Depreciation, Office Equipment, Building, Accumulated Depreciation, Building, Land , Accounts Payable Unearned Consulting Revenue, Notes Payable, Interest Payable, Common Stock, Retained Earnings, Dividends, Consulting Revenue, Interest Revenue, Payroll Expense, Advertising Expense, Insurance Expense, Interest Expense Telephone Expense, Utilities Expense, Repairs Expense, Postage Expense, Supplies Expense, Depreciation Expense, Office Equipment, Depreciation Expense, Building, Miscellaneous Expense, Cash Over and Short, Income Summary

Answer 1

Journalized the above transactions in general journal format and adjusted entries done with working.

please follow the working to understand the adjustment amounts

	General Journal
Date		Debit ($)	Credit ($)
January 1	Cash A/c                              DR	260,000.00
	Office Equipment A/c             DR	90,000.00
	To, Common Stock A/c		350,000.00
	(Common stock issued against cash and office equipment)
January 1	Land A/c                              DR	20,000.00
	Building A/c                           DR	120,000.00
	To, Cash A/c		50,000.00
	To, Notes Payable		90,000.00
	(Land and Building purchased for cash and notes payable)
January 1	Prepaid Insurance A/c           DR	2,400.00
	To, Cash A/c		2,400.00
	(Insurance expenses paid for one year)
January 3	Office Supplies A/c                        DR	3,600.00
	To, Accounts Payable A/c		3,600.00
	(Office supplies on account of office depot)
January 5	Petty Cash A/c                     DR	400.00
	To, Cash A/c		400.00
	(Transferred cash to petty cash )
January 7	Prepaid Advertising A/c         DR	1,800.00
	To, Cash A/c		1,800.00
	(Advertisment expeses for three months paid)
January 10	Accounts Receivable A/c       DR	12,000.00
	To, Consulting Revenue A/c		12,000.00
	(Revenue from consulting job on credit)
January 12	Cash A/c                              DR	10,000.00
	Accounts Receivable A/c       DR	8,500.00
	To, Consulting Revenue A/c		18,500.00
	(Revenue from consulting job on cash and credit)
January 15	Payroll Expense A/c              DR	8,000.00
	To, Cash A/c		8,000.00
	( semi-monthly payroll paid to workers)
January 18	Cash A/c                              DR	15,000.00
	To, Unearned Consulting Revenue A/c		15,000.00
	(Received in advacnce for future survice)
January 19	Accounts Payable A/c                        DR	2,500.00
	To, Cash A/c		2,500.00
	(Paid to office depot)
January 20	Cash A/c                              DR	8,000.00
	To, Accounts Receivable A/c		8,000.00
	(cash received from sales of January 10)
January 24	Cash A/c                              DR	5,000.00
	To, Consulting Revenue A/c		5,000.00
	(Cash received from consultaing work)
January 25	Cash A/c                              DR	4,000.00
	To, Accounts Receivable A/c		4,000.00
	(cash received from sales of January 12)
January 30	Telephone Expense A/c                    DR	375.00
	To, Accounts Payable A/c		375.00
	(Telephone bill for the month payable in next month)
January 31	Payroll Expense A/c              DR	8,000.00
	To, Cash A/c		8,000.00
	( semi-monthly payroll paid to workers)
January 31	Utilities Expense A/c                       DR	640.00
	To, Accounts Payable A/c		640.00
	(Utilities bill for the month payable in next month)
January 31	Cash A/c                              DR	313.00
	To, Petty Cash A/c		313.00
	(Cash reimburse from petty cash)
January 31	Postage Expense A/ c                    DR	24.00
	To, Petty Cash A/c		24.00
	(Expeses paid from petty cash)
January 31	Office supplies A/c                            DR	38.00
	To, Petty Cash A/c		38.00
	(Expeses paid from petty cash)
January 31	Miscellaneous Expense A/c               DR	22.00
	To, Petty Cash A/c		22.00
	(Expeses paid from petty cash)
January 31	Cash Over and Short A/c                 DR	3.00
	To, Petty Cash A/c		3.00
	(Cash short in petty cash fund)
January 31	Dividends A/c                                  DR	3,500.00
	To, Cash A/c		3,500.00
	(Dividends on 35000 common stock $0.10 per stock declared and paid)
January 31	Supplies Expense A/c          DR	1,500.00
	To, Office supplies A/c		1,500.00
	(Supplies consumed during the month)
January 31	Repairs Expense A/c                                 DR	280.00
	To, Cash A/c		280.00
	(Repairs of office equipment on January 26 recorded now)
January 31	Depreciation Expense A/c                          DR	333.33
	To, Accumulated Depreciation		333.33
	(Depreciation on Building recorded for the month)
January 31	Depreciation Expense A/c                          DR	750.00
	To, Office Equipment Accumulated Depreciation		750.00
	(Depreciation on Office Equipment recorded for the month)
January 31	Insurance Expense A/c                          DR	200.00
	To, Prepaid Insurance A/c		200.00
	(Prepaid insurance adjusted for the month)
January 31	Advertising Expense A/c                           DR	600.00
	To, Prepaid Advertising A/c		600.00
	(Prepaid insurance adjusted for the month)
January 31	Interest Expense A/c                             DR	375.00
	To, Interest Payable A/c		375.00
	(Annual interest payable recorded monthly)