Question

Complete the “July Journal Entries” tab in your workbook using the Step One data in the appendix.

The following events occur in July, 2018:

July 1: You take $10,000 from your personal savings account and buy common stock in Peyton Approved.

July 1: Purchase $6,500 in baking supplies from vendor, on account.

July 3: Your parents lend the company $10,000 cash in exchange for a two-year, 6% note payable. Interest and the principal are repayable at maturity.

July 7: Enter into a lease agreement for bakery space. The agreement is for 1 year. The rent is $1,500 per month, and the last month’s rent payment of $1,500 is required at time of lease agreement. The payment was made in cash. Lease period is effective July 1, 2018, through June 30, 2019.

July 10: Pay $375 to the county for a business license.

July 11: Purchase a cash register for $250 (deemed to be not material enough to qualify as depreciable equipment—use misc. exp.).

July 13: You have baking equipment, including an oven and mixer, which you have been using for your home-based business and will now start using in the bakery. You estimate that the equipment is currently worth $6,000, and you transfer the equipment into the business in exchange for additional common stock. The equipment has a 5-year useful life.

July 13: Pay $200 for business cards/flyers/posters/ads to use for advertising.

July 14: Pay $300 for office supplies.

July 15: Hire part-time helper to be paid $12 per hour. Pay periods are the 1st through the 15th and 16th through the end of the month, with paydays being the 20th for the first pay period and the 5th of the following month for the second pay period. (No entry is required on this date; it is here for informational purposes only.)

July 30: Received telephone bill for July in amount of $75. Payment is due on August 10.

July 31: Pay $2,400 for a 12-month insurance policy. Policy effective dates are August 1, 2018, through July 31, 2019.

July 31: Accrue wages earned for employee for period of 16th through 31st of July (Wage calculations table provided below). July 31: Total July bakery sales were $15,000. $5,000 of these sales are on accounts receivable

Answer 1

Date	Particulars	Debit	Credit
Jul-01	cash	10000
	common stock		10000
Jul-01	baking supplies	6500
	accounts payable		6500
Jul-03	cash	10000
	notes payable		10000
Jul-07	prepaid rent	1500
	rent expense	1500
	cash		3000
Jul-10	license expense	375
	cash		375
Jul-11	misc expense	250
	cash		250
Jul-13	equipment - baking	6000
	common stock		6000
Jul-13	advertisment expense	200
	cash		200
Jul-14	misc supplies	300
	cash		300
Jul-30	telephone expense	75
	accounts payable		75
Jul-31	prepaid insurance	2400
	cash		2400
Jul-31	salaries and wages expense	120
	salaries and wages payable		120
Jul-31	cash	10000
	accounts receivable	5000
	bakery revenue		15000