Question

All transaction occur in Jan 1, 2018

1- Jan 1, Jana Mohammad begins his own business with a cash investment of 150,000$.

2- Jan 10, Jana Mohammad paid 60000 cash for rent expenses

3- Jan 12, Jana Mohammad purchased for 20000 equipment she paid 2000 cash and 18000 on credit

4- Jan 12, Jana Mohammad paid 4500 cash for decoration expenses

5- Jan13,jana Mohammad purchased for 1000 supplies cash

6- Jan15, Jana Mohammad paid 500 cash for advertising expenses

7- Jan 18, Jana Mohammad purchased for 15000 car she paid 3000 cash and 12000 on credit

8- Jan 20, Jana Mohammad received 500 cash from customer for rent a lake in the shop

9- Jan 20, Jana Mohammad withdraw 300 cash from the business for her personal use

10- Jan 21, Jana Mohammad Purchased a one-year fire insurance policy for 30,000

11- Jan 22, customer rent a lake in the shop on account by 500

12- Jan 23,jana Mohammad paid 2000 cash for equipment which bought on credit (on transaction 3 )

13- Jan 24, Jana Mohammad borrowed 10,000$ by signing 5%, one-year note on february1, 2019.

14- Jan 25, Jana Mohammad paid 3000 cash salaries expenses

15- Jan 27, Jana Mohammad received 200 cash from the customer whose rent a lake on account ( transaction 11)

16- Jan 31, used shop supply during the month 600 Adjusted entry •

The equipment purchased on Jan12, 2018 is being depreciated using the straight-line method over 10 years, with a salvage value of $1,800.

• Jana Mohammad shop estimates that uncollectible accounts receivable at year-end is 300 • The short-term note is dated Jan 1, 2018, and carries a 5% interest rate. Prepare adjusting journal entries for each transactions and post to the ledger for each transaction

Answer 1

	Jounal
		Debit	Credit
1	Cash	1,50,000
	To Capital		1,50,000
2	Rent	60,000
	To Cash		60,000
3	Equipment	20,000
	To Cash		2,000
	To Equipment vendor		18,000
4	Decoration Expenses	4,500
	To Cash		4,500
5	Supplies	1,000
	To cash		1,000
6	Advertisement Expense	500
	To Cash		500
7	Car	15,000
	To Cash		3,000
	To Car Vendor		12,000
8	Cash	500
	To sales from rent a lake		500
9	Drawings	300
	To Cash		300
10	Fire Insurance Expenses	2,500
	Prepaid fire insurance	27,500
	To Cash		30,000
11	Accounts Receivable	500
	To sales from rent a lake		500
12	Equipment vendor	2,000
	To Cash		2,000
13	Cash	10,000
	To Notes payable		10,000
14	Salaries	3,000
	To Cash		3,000
15	Cash	200
	To Accounts Receivable		200
16	Supply expenses	600
	To Supplies		600
17	Capital	300
	To Drawings		300
18	Dprecation Account	151.67
	To Accumulated Depreciation		151.67
19	Interest Expense	41.67
	To Interest payable		41.67
	(10,000*5%*1/12)
20	Bad Debts Expense	300
	To Allowance for Doubtful Accounts		300

Depreciation Calculation

Depreciation per year= (Cost of acquisition-Salvage Value)/Life of asset

Depreciation per year= (20,000-1800)/10

Depreciation per year= 1820

Depreciation for January= 1820/12

Depreciation for January= 151.67

Cash Account					Capital Account
Particulars	Amount	Particulars	Amount		Particulars	Amount	Particulars	Amount
To Capital	1,50,000	By Rent	60,000		To Drawings	300	By Cash	1,50,000
To sales from rent a lake	500	By Equipment	2,000		To Balance C/F	1,49,700
To Notes payable	10,000	By Decoration Expenses	4,500			1,50,000		1,50,000
To Accounts Receivable	200	By Supplies	1,000
		By Advertisement Expense	500
		By Car	3,000		Rent Account
		By Drawings	300		Particulars	Amount	Particulars	Amount
		By Fire Insurance Expenses	2500		To Cash	60,000	By Balance C/F	60,000
		By Prepaid fire insurance	27500
		By Equipment Vendor	2000			60,000		60,000
		By Salaries	3000		Equipment Account
		By Balance C/F	54400	0	Particulars	Amount	Particulars	Amount
	1,60,700		1,60,700		To Cash	2,000	By Balance C/F	20,000
					To Equipment vendor	18,000
Equipment Vendor Account						20,000		20,000
Particulars	Amount	Particulars	Amount
To cash	2,000	By Equipment	18,000		Supllies Account
To Balance C/F	16,000				Particulars	Amount	Particulars	Amount
	18,000		18,000		To Cash	1,000	By Supply Expenses	600
Decoration Expenses Account							By Balance C/F	400
Particulars	Amount	Particulars	Amount			1,000		1,000
To Cash	4,500	By Balance C/F	4,500		Advertisement Expenses Account
	4,500		4,500		Particulars	Amount	Particulars	Amount
					To Cash	500	By Balance C/F	500
Car Account						500		500
Particulars	Amount	Particulars	Amount
To Cash	3,000	By Balance C/F	15,000		Sales from rent a lake Account
To Car Vendor	12,000				Particulars	Amount	Particulars	Amount
	15,000		15,000		To Balance C/F	1,000	By Cash	500
Car Vendor Account					To Accounts Receivable		By Accounts Receivable	500
Particulars	Amount	Particulars	Amount			1,000		1,000
To Balance C/F	12,000	By Car	12,000		Fire Insurance Expenses Account
	12,000		12,000		Particulars	Amount	Particulars	Amount
					To Cash	2,500	By Balance C/F	2,500
						2,500		2,500
Drawings Account
Particulars	Amount	Particulars	Amount
To Cash	300	By Capital	300		Accounts Receivable Account
	300		300		Particulars	Amount	Particulars	Amount
					To sales from rent a lake	500	By Cash	200
Prepaid Fire Insurance Account							By Balance C/F	300
Particulars	Amount	Particulars	Amount			500		500
To Cash	27,500	By Balance C/F	27,500		Notes Payable Account
	27,500		27,500		Particulars	Amount	Particulars	Amount
					To Balance C/F	10,000	By Cash	10,000
Salaries Account						10,000		10,000
Particulars	Amount	Particulars	Amount
To Cash	3,000	By Balance C/F	3,000
	3,000		3,000		Supply Expenses Account
					Particulars	Amount	Particulars	Amount
					To Supplies	600	By Balance C/F	600
Depreciation Account						600		600
Particulars	Amount	Particulars	Amount
To Accumulated Depreciation	152	By Balance C/F	152		Accumulated Depreciation Account
	152		152		Particulars	Amount	Particulars	Amount
					To Balance C/F	152	By Depreciation	152
						152		152
Interest Expense Account					Interest Payable Account
Particulars	Amount	Particulars	Amount		Particulars	Amount	Particulars	Amount
To Interest payable	42	By Balance C/F	42		To Balance C/F	42	By Interest Expense	42
	42		42			42		42
Bad Debt Expense Account					Interest Payable Account
Particulars	Amount	Particulars	Amount		Particulars	Amount	Particulars	Amount
To Allowance for Doubtful Accounts	300	By Balance C/F	300		To Balance C/F	300	By Bad Debts Expense	300
	300		300			300		300