Question

Create journal entries for each transactions and post them to the correct ledger/t-accounts.

Standard Transactions:

1. On November 1, Chris Clark deposited $25,000 in a bank account in the name of NetSolutions.

2. On November 5, NetSolutions paid $20,000 for the purchase of land as a future building site.

3. On November 10, NetSolutions purchased supplies on account for $1,350.

4. On November 18, NetSolutions received cash of $7,500 from customers for services provided.

5. On November 30, 2018, NetSolutions paid the following expenses: wages, $2,125; rent, $800; utilities, $450; and miscellaneous, $275.

6. On November 30, 2018, NetSolutions paid creditors on account, $950.

7. On November 30, 2018, Chris Clark determined that the cost of supplies on hand at the end of the month was $550.

8. On November 30, 2018, Chris Clark withdrew $2,000 from NetSolutions for personal use.

9. On December 1, NetSolutions paid rent for December, $800.

10. On December 1, NetSolutions received an offer from a local retailer to rent the land purchased on November 5. The retailer plans to use the land as a parking lot for its employees and customers. NetSolutions agreed to rent the land to the retailer for three months, with the rent payable in advance. NetSolutions received $360 for three months’ rent beginning December 1.

11. On December 4, NetSolutions purchased office equipment on account from Executive Supply Co. for $1,800.

12. On December 6, NetSolutions paid $180 for a newspaper advertisement.

13. On December 11, NetSolutions paid creditors $400.

14. On December 13, NetSolutions paid a receptionist and a part-time assistant $950 for two weeks’ wages.

15. On December 16, NetSolutions received $3,100 from fees earned for the first half of December.

16. Fees earned on account totaled $1,750 for the first half of December.

17. On December 20, NetSolutions paid $900 to Executive Supply Co. on the $1,800 debt owed from the December 4 transaction.

18. On December 21, NetSolutions received $650 from customers in payment of their accounts.

19. On December 23, NetSolutions paid $1,450 for supplies.

20. On December 27, NetSolutions paid the receptionist and the part-time assistant $1,200 for two weeks’ wages.

21. On December 31, NetSolutions paid its $310 telephone bill for the month.

22. On December 31, NetSolutions paid its $225 electric bill for the month.

23. On December 31, NetSolutions received $2,870 from fees earned for the second half of December.

24. On December 31, fees earned on account totaled $1,120 for the second half of December.

25. On December 31, Chris Clark withdrew $2,000 for personal use

Adjusting Entries:

26. Assume that NetSolutions signed an agreement with Dankner Co. on December 15 to provide services at a rate of $20 per hour. As of December 31, NetSolutions had provided 25 hours of services. The revenue will be billed on January 15.

27. NetSolutions pays it employees biweekly. During December, NetSolutions paid wages of $950 on December 13 and $1,200 on December 27. As of December 31, NetSolutions owes $250 of wages to employees for Monday and Tuesday, December 30 and 31.

28. NetSolutions paid wages of $1,275 on January 10. This payment includes the $250 of accrued wages recorded on December 31.

29. The December 31 unadjusted trial balance of NetSolutions indicates a balance in the unearned rent account of $360. This balance represents the receipt of three months’ rent on December 1 for December, January, and February. At the end of December, one month’s rent has been earned.

30. The December 31, 2018, unadjusted trial balance of NetSolutions indicates a balance in the supplies account of $2,000. Some of these supplies were used during December, and some are still on hand (not used). Assuming that on December 31 the amount of supplies on hand is $760, the amount to be transferred from the asset account to the expense account is computed as follows:

31. The December 31, unadjusted trial balance of NetSolutions indicates a balance in the prepaid insurance account of $2,400. The debit balance of $2,400 represents the December 1 prepayment of insurance for 12 months. At the end of December, the insurance expense account is increased (debited), and the prepaid insurance account is decreased (credited) by $200, the insurance for one month.

32. NetSolutions’ office equipment depreciates $50 during December.

Answer 1

	Journal entries
1	01-Nov	Cash	25000
		To Onwer's capital		25000
2	05-Nov	Land	20000
		To cash		20000
3	10-Nov	Supplies	1350
		To accounts payable		1350
4	18-Nov	Cash	7500
		To service revenue		7500
5	30-Nov	Wages expense	2125
		Rent expense	800
		Utilities expense	450
		Misc expense	275
		To cash		3650
6		Accounts payable	950
		To cash		950
7		Supplies expense	800
		To supplies		800
8		Drawings	2000
		To cash		2000

9	01-Dec	Rent expense	800
		To cash		800
10		Cash	360
		To unearned rent revenue		360
11	04-Dec	Office equipment	1800
		To accounts payable		1800
12	06-Dec	Advertisement expense	180
		To cash		180
13	11-Dec	Accounts payable	400
		To cash		400
14	13-Dec	Wages expense	950
		To cash		950
15	16-Dec	Cash	3100
		To service revenue		3100
16		Accounts receivable	1750
		To service revenue		1750
17	20-Dec	Accounts payable	900
		To cash		900
18	21-Dec	cash	650
		To accounts receivable		650
19	23-Dec	Supplies	1450
		To cash		1450
20	27-Dec	Wages expense	1200
		To cash		1200
21	31-Dec	Telephone expense	310
		To cash		310
22		Electiricity expense	225
		To cash		225
23		Cash	2870
		To service revenue		2870
24		Accounts receivable	1120
		To service revenue		1120
25		Drawings	2000
		To cash		2000

	Adjusting entries
26		Accounts receivable	500
		To service revenue		500
27		Wages expense	250
		To wages payable		250
28		No entry
29		Unearned rent revenue	120
		To rent revenue		120
30		Supplies expense	1240
		To supplies		1240
31		Prepaid insurance	2400
		To cash		2400
		Insurance expense	200
		To Prepaid insurance		200
32		Depreciation on office equipment	50
		To Accumulated depreciation, office equipment		50

T accounts
Owner's capital
	Dr		Cr
		1	25000
		End Balance	25000
Land
	Dr		Cr
2	20000
End balance	20000
Supplies
	Dr		Cr
3	1350	7	800
19	1450	30	1240
End balance	760
Cash
	Dr		Cr
1	25000	2	20000
4	7500	5	3650
10	360	6	950
15	3100	8	2000
18	650	9	800
23	2870	12	180
		13	400
		14	950
		17	900
		19	1450
		20	1200
		21	310
		22	225
		25	2000
		31	2400
End balance	2065

Service revenue
	Dr		Cr
		4	7500
		15	3100
		16	1750
		23	2870
		24	1120
		26	500
		End balance	16840
Wages expense
	Dr		Cr
5	2125
14	950
20	1200
27	250
End balance	4525
Rent expense
	Dr		Cr
5	800
9	800
End balance	1600
Utilities expense
	Dr		Cr
5	450
End balance	450
Misc expense
	Dr		Cr
5	275
End balance	275
Office equipment
	Dr		Cr
11	1800
End balace	1800
Telephone expense
	Dr		Cr
21	310
End balance	310

Accounts payable
	Dr		Cr
6	950	3	1350
13	400	11	1800
17	900
		End balance	900
Supplies expense
	Dr		Cr
7	800
30	1240
Balance	2040
Drawings
	Dr		Cr
8	2000
25	2000
End balance	4000
unearned rent revenue
	Dr		Cr
29	120	10	360
		End balance	240
Advertisement expense
	Dr		Cr
12	180
End balance	180
Accounts receivable
	Dr		Cr
16	1750	18	650
24	1120
26	500
End balance	2720

Electircity
	Dr		Cr
22	225
End balance	225
Wages payable
	Dr		Cr
		27	250
		End balance	250
Rent revenue
	Dr		Cr
		29	120
		End balance	120
Prepaid insurance
	Dr		Cr
31	2400	31	200
End balance	2200
Insurance expense
	Dr		Cr
31	200
End balance	200
Depreciation expense, office equipment
	Dr		Cr
32	50
End balance	50
Accumulated depreciation office equipment
	Dr		Cr
		32	50
		End balance	50