Question

BUSINESS TRANSACTIONS for the Month of December.

1) 12-1 The Shark Corp Received $250,000 from SJ Sharkie in exchange for 5,000 shares of Common Stock.

2) 12-2 The Shark Corp Borrowed $50,000 from Wells Fargo Bank and signed a Note.

3) 12-3 The Shark Corp purchased Office Furniture for $100,000(5 year life), on account from IKEA..

4) 12-4 The Shark Corp purchased Computer Equipment for $60,000(5 year life), on account from Office Depot

5) 12-5 The Shark Corp paid $18,000 with Check#101 for Corporate Insurance for the next 12 months.(Dec-Nov)

6) 12-10 The Shark Corp paid $20,000 with Check#102 for December Rent.

7) 12-11 The Shark Corp provided a mascot Seminar for the NIKE Corp and Billed Nike $120,000 on account.

8) 12-15 The Shark Corp received the December Utility Bill from PGE in the amount of $7,000 to be paid in Jan.

9) 12-16 The Shark Corp received the December Telephone Bill from SBC for $4,000 to be paid Later.

10) 12-17 The Shark Corp received a $70,000 Check from Nike Corp on account for services previously provided.

11) 12-20 The Shark Corp paid $12,000 with check #103 to Mark’s Marketing for Professional Fees Expense.

12) 12-25 The Shark Corp paid $45,000 with Check #104 for December Salary expenses.

13) 12-27 The Shark Corp received a $25,000 Check from Buick Corp for services to be provided in January.

14) 12-28 The Shark Corp Paid $100,000 with Check#105 to IKEA Corp for the Office Furniture purchased above.

15) 12-29 The Shark Corp Paid $4,000 with Check #106 to SBC on account for the Telephone Bill.

16) 12-30 The Shark Corp Paid $11,000 with Check#107 to Mr. SJ Sharkie for Dividends to the owner.

17) 12-30 The Shark Corp paid $3,000 with check #108 to WF Bank on the note, $1,000 was for Interest Expense.

18) 12-31 The Shark Corp recorded one Month of Insurance expense from the Prepaid Insurance account.

19) 12-31 The Shark Corp recorded one Month of Depreciation Expense on the Furniture and the Computer Equip.

20) 12-31 The Shark Corp recorded Income Tax Payable and Income Tax Expense for December, which is 40% of Net Income.(Taxes to be discussed in Zoom meeting)

Do the following:

- Prepare the Accounting Journal, record all Accounting Entries based on the Transactions Below into the Journal using the proper Journal Format.

• Include explanations and also calculations where needed

- Prepare the General Ledger/T-Accounts, post all transactions from the Journal into the GL Accounts.

• Use the Accounting Transaction Reference Numbers from above to identify amounts in your T-Accounts.

Answer 1

1.

Transaction	Date	Account Titles and Explanations	Debit	Credit
	December		$	$
1.	1	Cash	250,000
		Common Stock		250,000
		Issuance of common stock for cash
2	2	Cash	50,000
		Notes Payable		50,000
		Cash borrowed on a note payable
3	3	Office Furniture	100,000
		Accounts Payable		100,000
		Purchase of office furniture on account
4.	4	Computer Equipment	60,000
		Accounts Payable		60,000
		Purchase of computer equipment on account
5	5	Prepaid Insurance	18,000
		Cash		18,000
		Prepayment of insurance policy
6	10	Rent Expense	20,000
		Cash		20,000
		Paid cash for rent
7.	11	Accounts Receivable	120,000
		Service Revenue		120,000
		Service performed on account
8.	15	Utilities Expense	7,000
		Accounts Payable		7,000
		Utilities expense accrued
9.	16	Telephone Expense	4,000
		Accounts Payable		4,000
		Telephone expense accrued
10.	17	Cash	70,000
		Accounts Receivable		70,000
		Cash received from customer on account
11.	20	Professional Fees Expense	12,000
		Cash		12,000
		Payment for professional services received
12	25	Salaries Expense	45,000
		Cash		45,000
		Cash paid for salaries
13	27	Cash	25,000
		Unearned Revenue		25,000
		Advance received from customer for services to be performed
14.	28	Accounts Payable	100,000
		Cash		100,000
		Cash paid to supplier on account
15	29	Accounts Payable	4,000
		Cash		4,000
		Cash paid for outstanding telephone bill
16	30	Dividends	11,000
		Cash		11,000
		Cash paid for dividends
17	30	Interest Expense	1,000
		Notes Payable	2,000
		Cash		3,000
		Principal and interest payment on note payable
18	31	Insurance Expense	1,500
		Prepaid Insurance		1,500
		To adjust for insurance expense
19	31	Depreciation Expense	2,667
		Accumulated Depreciation: Office Furniture		1,667
		Accumulated Depreciation: Computer Equipment		1,000
		To record depreciation expense for the month on office furniture and computer equipment
20	31	Income Tax Expense	10,733
		Income Taxes Payable		10,733
		To record accrued income tax expense