Question

Sunny So completed the following transactions during January of 2020:
Jan 1 Began a consulting practice by investing $25,000 cash and office equipment
with a $5,000 value.
2 Purchased $1,200 of office equipment on credit.
3 Purchased $500 of office supplies on credit.
4 Completed work for a client and immediately received payment of $1,000 cash
5 Completed work for Yellow River Co. on credit, $5,700.
9 Paid for the supplies purchased on credit on December 3.
12 Paid for the annual $960 premium on an insurance policy.
15 Received payment in full from Yellow River Co. for the work completed on December 5.
18 Sunny withdrew $1,000 cash from the business to pay personal expenses.
25 Received $20,000 in advance from a client for services to be performed next year.

Required:
1. Prepare general journal entries to record the above transactions. Include a short
description for each entry.
2. Prepare a trial balance.
Part B:
Define the following terms:
1. Double-entry accounting
2. Account
3. Debit
4. Journal
5. Trial balance

Answer 1