Question

The transactions completed by PS Music during June 2018 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the business’s operations: Jul. 1 Peyton Smith made an additional investment in PS Music in exchange for common stock by depositing $5,000 in PS Music’s checking account. 1 Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, $1,750. 1 Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2 Received $1,000 on account. 3 On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600. Any additional hours beyond 80 will be billed to KXMD at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment for the first two months. 3 Paid $250 on account. 4 Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5 Purchased office equipment on account from Office Mart, $7,500. 8 Paid for a newspaper advertisement, $200. 11 Received $1,000 for serving as a disc jockey for a party. 13 Paid $700 to a local audio electronics store for rental of digital recording equipment. 14 Paid wages of $1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: Jul. 16 Received $2,000 for serving as a disc jockey for a wedding reception. 18 Purchased supplies on account, $850. 21 Paid $620 to Upload Music for use of its current music demos in making various music sets. 22 Paid $800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23 Served as disc jockey for a party for $2,500. Received $750, with the remainder due August 4, 2018. 27 Paid electric bill, $915. 28 Paid wages of $1,200 to receptionist and part-time assistant. 29 Paid miscellaneous expenses, $540. 30 Served as a disc jockey for a charity ball for $1,500. Received $500, with the remainder due on August 9, 2018. 31 Received $3,000 for serving as a disc jockey for a party. 31 Paid $1,400 royalties (music expense) to National Music Clearing for use of various artists’ music during July. 31 Paid dividends, $1,250. PS Music’s chart of accounts and the balance of accounts as of July 1, 2018 (all normal balances), are as follows: 11 Cash $3,920 12 Accounts Receivable 1,000 14 Supplies 170 15 Prepaid Insurance — 17 Office Equipment — 21 Accounts Payable 250 23 Unearned Revenue — 31 Common Stock 4,000 33 Dividends 500 41 Fees Earned 6,200 50 Wages Expense 400 51 Office Rent Expense 800 52 Equipment Rent Expense 675 53 Utilities Expense 300 54 Music Expense 1,590 55 Advertising Expense 500 56 Supplies Expense 180 59 Miscellaneous Expense 415 Required: 1. Enter the July 1, 2018, account balances in the appropriate balance column of a four-column account. No entry is needed for accounts with a zero balance. Write Balance in the Item column, and select a check mark in the Posting Reference column. (Note: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2. Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. Refer to the Chart of Accounts for exact wording of account titles. 3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. Indicate a zero balance by inserting a 0 (zero) in either of the Balance columns opposite the entry. 4. Prepare an unadjusted trial balance as of July 31, 2018. none of the previous answers have the entire answers

Answer 1

Journal Entries
Date	Account Heads	Debit	Credit
Jul-01	Cash	$5,000
	Common stock		$5,000
	Office rent expense	$1,750
	Cash		$1,750
	Miscellaneous expenses (Insurance for 1 month-2700/12	$225
	Prepaid Insurance	$2,475
	Cash		$2,700
2	Cash	$1,000
	Accounts Payables		$1,000
3	Cash	$7,200
	Fees earned		$3,600
	Unearned Revenue		$3,600
3	Accounts receivables	$250
	Cash		$250
4	Miscellaneous expenses	$900
	Cash		$900
5	Office equipment	$7,500
	Accounts payables		$7,500
8	Advertising expense	$200
	Cash		$200
11	Cash	$1,000
	Fees earned		$1,000
13	Equipment rent expense	$700
	Cash		$700
14	Wages	$1,200
	Cash		$1,200
16	Cash	$2,000
	Fees earned		$2,000
18	Supplies	$850
	Accounts payables		$850
21	Music expense	$620
	cash		$620
22	Advertising expense	$800
	Cash		$800
23	Cash	$750
	Accounts receivables	$1,750
	Fees earned		$2,500
27	Miscellaneous expense	$915
	Cash		$915
28	Wages	$1,200
	Cash		$1,200
29	Miscellaneous expense	$540
	Cash		$540
30	Cash	$500
	Accounts receivables	$1,000
	Fees earned		$1,500
31	Cash	$3,000
	Fees earned		$3,000
31	Music expense	$1,400
	cash		$1,400
31	Dividends	$1,250
	Cash		$1,250

TRIAL BALANCE as on July 1,2016
			Balance
	Debit	Credit	Debit	Credit
Cash	$3,920		$3,920
Accounts Receivables	$1,000		$1,000
Supplies	$170		$170
Pre-paid insurance	$0		$0
Office equipment	$0		$0
Accounts Payables		$250		$250
Unearned revenue		$0		$0
Common stock		$4,000		$4,000
Dividends	$500		$500
Fees earned		$6,200		$6,200
Wages expense	$400		$400
Office rent expense	$800		$800
Equipment rent expense	$675		$675
Utilities expense	$300		$300
Music expense	$1,590		$1,590
Advertising expense	$500		$500
Supplies expense	$180		$180
Miscellaneous expense	$415		$415
	$10,450	$10,450	$10,450	$10,450

TRIAL BALANCE as on July 1,2016
			Additions during July		Balance as on july-31
	Debit	Credit	Debit	Credit	Debit	Credit
Cash	$3,920		$6,025		$9,945
Accounts Receivables	$1,000		$3,000		$4,000
Supplies	$170		$850		$1,020
Pre-paid insurance	$0		$2,475		$2,475
Office equipment	$0		$7,500		$7,500
Accounts Payables		$250		$9,350		$9,600
Unearned revenue		$0		$3,600		$3,600
Common stock		$4,000		$5,000		$9,000
Dividends	$500		$1,250		$1,750
Fees earned		$6,200		$13,600		$19,800
Wages expense	$400		$2,400		$2,800
Office rent expense	$800		$1,750		$2,550
Equipment rent expense	$675		$700		$1,375
Utilities expense	$300				$300
Music expense	$1,590		$2,020		$3,610
Advertising expense	$500		$1,000		$1,500
Supplies expense	$180				$180
Miscellaneous expense	$415		$2,580		$2,995
	$10,450	$10,450	$31,550	$31,550	$42,000	$42,000

	Accounts Payables	Debit	Credit
Jul-01	Opening balance		$250
2	Cash recd.		$1,000
5	Office equipment		$7,500
18	Supplies		$850
			$9,600
Jul-01	Opening balance	$1,000
3	Cash paid	$250
23	Fees earned	$1,750
30	Fees earned	$1,000
		$4,000
Advertising expense
Jul-01	Opening balance	$500
8	Cash paid	$200
22	Cash paid	$800
		$1,500
Cash a/c
Jul-01	Opening balance	$3,920
	Common stock issue	$5,000
	Office rent expense		$1,750
	Insurance		$2,700
2	On a/c receipt	$1,000
3	Fees earned	$7,200
	On a/c payment		$250
4	Attorney fees(Miscell.)		$900
8	Advertising expense		$200
11	Fees earned	$1,000
13	Equipment rent expense		$700
14	Wages		$1,200
16	Fees earned	$2,000
21	Music expense		$620
22	Advertising expense		$800
23	Fees earned	$750
27	Electricity bill(Misell.)		$915
28	Wages		$1,200
29	Miscllaneous expense		$540
30	Fees earned	$500
31	Fees earned	$3,000
	Music expense		$1,400
	Dividends		$1,250
		$24,370	$14,425
	Debit balance		$9,945
Common stock
Jul-01	Opening balance		$4,000
	Cash		$5,000
			$9,000
Dividends
Jul-01	Opening balance	$500
Jul-31	Cash	$1,250
		$1,750
Equipment rent expense
Jul-01	Opening balance	$675
Jul-13	Cash	$700
		$1,375
Fees earned
Jul-01	Opening balance		$6,200
3	Cash		$3,600
11	Cash		$1,000
16	Cash		$2,000
23	Cash		$750
	Accounts receivables		$1,750
30	Cash		$500
	Accounts receivables		$1,000
31	Cash		$3,000
			$19,800
Miscellaneous expense
Jul-01	Opening balance	$415
1	Cash(Insurance for 1 month-2700/12	$225
4	Cash-Attorney fees	$900
Jul-27	Cash-Electricity	$915
29	Cash	$540
		$2,995
Music expense
Jul-01	Opening balance	$1,590
21	Cash	$620
31	Cash	$1,400
Office equipment
Jul-05	Accounts payables	$7,500
Office rent expense
Jul-01	Opening balance	$800
	Cash	$1,750
		$2,550
Prepaid Insurance
Jul-01	Cash	$2,475
Supplies
Jul-01	Opening balance	$170
Jul-18	Accounts Payables	$850
		$1,020
Unearned Revenue
Jul-03	Cash		$3,600
Wages
Jul-01	Opening balance	$400
Jul-14	Cash	$1,200
Jul-28	Cash	$1,200
		$2,800