Question

Create a General ledger

January 1st	Common stock is issued in exchange for cash in the amount of ………….………….………………………								295,000
February 8th	The company purchases and pays for 160 units of gourmet dog food at a price of $25 per unit …………..								4,000
March 1st	The company pays cash for a one-year insurance policy in the amount of ……………….………………………..…..								9,300
March 31st	Rent on a retail space for 12 months is paid in the amount of …..……….………………………………………								12,480
April 1st	Grooming and boarding equipment with a useful life of 2 years is purchased for cash in the amount of ……								18,000
April 10th	Grooming supplies purchased on account in the amount of …………..……………………………………………								1,450
May 15th	The company purchases and pays for another 370 units of gourmet dog food at a price of $29 per unit …..								10,730
May 30th	Grooming services are performed on account in the amount of …………………………………………………………..…………								13,625
June 1st	The company pays for advertisements to be run for the next 12 months in the amount of ……………………….								864
June 30th	The company issues a 5-year bond with a face value of $100,000 and a stated annual rate of 6%.
	Interest is due on June 30th each year. The market rate is 8% on the date of issuance …………………………….								100,000
July 25th	Dog-walking services are performed on account in the amount of …...……………………………..…………								14,225
July 31st	95 units of gourmet dog food are sold for $70 per unit with terms 2/10, n/30. The sale is recorded using
	the gross method in the amount of (see note c for cost flow assumptions) …………………………………………………………………………………….								6,650
August 2nd	Boarding services are provided on account in the amount of ……………………………………………………………….								6,280
August 6th	The company receives full payment from the customer for the July 31st sale ………………………………………								6,517
September 15th	Pet sitting services are performed on account in the amount of ……………………..…………………………….…………..								6,245
September 29th	Customer payments are received for services previously provided in the amount of ………………………………..								1,250
October 13th	100 units of gourmet dog food are sold for $73 per unit with terms 2/10, n/30. The sale is recorded using
	the gross method in the amount of ……………………………………………………………………………………….								7,300
October 29th	The company receives payment for half of the October 13th sale ………………………………………………………								3,650
November 1st	Equipment originally purchased on April 1st for $2400 is sold for $2000 cash
November 15th	A bookkeeper is hired to help the company with daily accounting taxes and annual tax preparation
December 15th	The bookkeeper is paid $3,500 for the previous month's services								3,500

Answer 1

Solution:

Date	Account Titles and Explanation	Debit ($)	Credit ($)
January 1st	Cash	295,000
	Common stock		295,000
February 8th	Purchase	4,000
	Cash		4,000
March 1st	Prepaid Insurance	9,300
	Cash		9,300
March 31st	Rent	12,480
	Cash		12,480
April 1st	Equipment	18,000
	Cash		18,000
April 10th	Supplies	1,450
	Accounts Payable		1,450
May 15th	Purchase	10,730
	Cash		10,730
May 30th	Accounts Receivable	13,625
	Service Revenue (For grooming services)		13,625
June 1st	Advertisement expense	864
	Cash		864
June 30th	Cash	100,000
	Bond Payable		100,000
June 30th	Bond interest expense payable	No entry
	Cash		No entry
	As bonds are issued on June 30, interest will be due in next year.
July 25th	Accounts Receivable	14,225
	Service Revenue(For dog walking services)		14,225
July 31st	Accounts receivable	6,650
	Sales		6,650
August 2nd	Accounts Receivable	6,280
	Service Revenue (For boarding services)		6,280
August 6th	Cash	6,517
	Discount on sales	133
	Accounts Receivable		6,650
September 15th	Accounts Receivable	6,245
	Service Revenue(For Pet sitting services)		6,245
September 29th	Cash	1,250
	Accounts Receivable		1,250
October 13th	Accounts receivable	7,300
	Sales		7,300
October 29th	Cash	3,577
	Discount on sales	73
	Accounts Receivable		3,650
November 1st	Cash	2,000
	Loss on sale of equipment	4,000
	Equipment		2,400
November 15th	Salaries expense	3,500
	Salaries Payable		3,500
December 15th	Salaries Payable	3,500
	Cash		3,500