Question

On January 2 Sheldon Eagle started an aviation training school named Fly Eagle Fly. Record the following January 2018 transactions in appropriate general journal form:

January 2: Mr. Eagle invested $50,000 of cash, $15,000 of office equipment (a computer and copy machine) and $2,000 of office furniture in the business in exchange for 100 shares of capital stock.

                3: Purchased a one-year (January 2018 through December 2018) professional liability insurance policy for $3,600.

                4: Paid office rent in advance for January, February and March $6,000. (Consider the January rent as an expense).

                5: Purchased $500 of office supplies for cash.

                8: Performed training sessions for client ABC $10,000 and collected this amount.

              15: Paid the secretary his semi-monthly salary of $1,000.

              16: Purchased $2,000 of office supplies on account.

               18: Purchased a car for business purposes for $25,000. He paid $5,000 down and signed a promissory note for the balance.

               20: Received a telephone bill for $100.

               21: Purchased and paid for another office computer, $1,500.

               23: Billed Client DEF $5,000 for training services rendered.   

               25: Received $ 3,000 from Client GHI for training that will be performed in May.

29: Paid $200 for maintenance costs for the car.

30: Paid the telephone bill received on January 20 and paid the secretary his semi-monthly salary of $1,000.

               31:   Received an invoice for January office cleaning services $2,500.

               

                 

2. After you record the above transactions in the journal, post them to ledger accounts. Make up simple T accounts similar to those below:

                              _________________________________                                ______________________________

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3. Prepare a trial balance at January 31, 2018.

4. Prepare an income statement for the month of January.

Answer 1