Question

Write journal entries to record all of the following transactions. The following transactions pertain to the Bongiorno Corporation’s 20x4 fiscal year:

Jan 1 The business was established by Joe Bongiorno who invested $100,000 cash in exchange for common shares. Jan 2 Signed a two-year lease for office space. The monthly rent is $3,000. The first month’s rent was paid on Jan 2. In addition, a $5,000 security deposit was also paid to the landlord. This security deposit will be refundable on December 31, 20x5. Jan 15 Purchased $3,500 of supplies on account. Jan 30 Purchased office furniture costing $15,000 for cash. Jan 31 Purchased a two-year insurance policy at a cost of $3,840. The insurance policy takes effect on Feb 1. Feb 15 Paid for the supplies purchased on Jan 15. Dec 15 Received $4,500 from a customer for services to be provided in January 20x5. Dec 31 Write the adjusting entry for the insurance expense. Dec 31 It is estimated that the furniture will be used for 10 years. Assume straight-line depreciation and no residual value. Dec 31 A count of supplies shows that there are $1,100 of supplies remaining.

Answer 1

Date	Account Titles	Debit $	Credit $
Jan.1	Cash	100,000
	Common Shares		100,000
Jan.2	Rent Expense	3,000
	Refundable Security Deposit	5,000
	Cash		8,000
Jan.15	Supplies	3,500
	Accounts payable		3,500
Jan.30	Office Furniture	15,000
	Cash		15,000
Jan.31	Prepaid Insurance	3,840
	Cash		3,840
Feb.15	Accounts Payable	3,500
	Cash		3,500
Dec.15	Cash	4,500
	Unearned Service revenue		4,500
Dec.31	Insurance Expense	1,760
	Prepaid Insurance		1,760
	(3,840 / 24 ) x 11
Dec.31	Depreciation expense	1,375
	Accumulated Depreciation- Office Furniture		1,375
	(15,000 / 10 ) x 11/12
Dec.31	Supplies Expense	2,400
	Supplies		2,400
	(3,500 - 1,100 )