Question

Journalize the following transactions and use the worksheet to prepare an Adjusted Trial Balance. a)Started event business with $30,000 of personal investment and $20,000 loan from the bank. b)Purchased office furniture by paying $20,000 in notes, of which $5,000 is due the end year and $15,000 in next 4 years c)Paid $1,200 of liability insurance for 12 months (not expensed yet). d)Purchased $2,000 worth of event supplies on account, due by the end of next month. e)During the month, we hosted two events and generated revenues of $3,500 (cash) and $2,500 (on account) respectively. f)Paid monthly rent of $2,500 for the office space.

Answer 1

Journal entries:
S.no.	Accounts title and explanations				Debit $	Credit $
a.	Cash Account Dr.				50000
	Owner's capital					30000
	Bank loan payable					20000
b.	Furniture Account Dr.				20000
	Notes payable					20000
c.	Prepaid insurance Acccount Dr.				1200
	Cash account					1200
d.	Supplies Account Dr.				2000
	Accounts payable					2000
e.	Cash Account Dr.				3500
	Accounts receivable Account Dr.				2500
	Service revenue					6000
f.	Rent expense Account Dr.				2500
	Cash account					2500
Unadjusted Trial balance
				Debit	Credit
Cash Account				49800
Accounts receivable				2500
Supplies				2000
Prepaid insurance				1200
Furniture				20000
Accounts payable					2000
Notes payable					20000
Bank loan payable					20000
Owner's capital					30000
Service revenues					6000
Rent expense				2500
TOTAL				78000	78000