Question

Journalize the following information: The following events occur in July, 2018:

July 1: You take $10,000 from your personal savings account and buy common stock in Peyton Approved.

July 1: Purchase $6,500 in baking supplies from vendor, on account.

July 3: Your parents lend the company $10,000 cash in exchange for a two-year, 6% note payable. Interest and the principal are repayable at maturity.

July 7: Enter into a lease agreement for bakery space. The agreement is for 1 year. The rent is $1,500 per month, and the last month’s rent payment of $1,500 is required at time of lease agreement. The payment was made in cash. Lease period is effective July 1, 2018, through June 30, 2019.

July 10: Pay $375 to the county for a business license. July 11: Purchase a cash register for $250 (deemed to be not material enough to qualify as depreciable equipment—use misc. exp.).

July 13: You have baking equipment, including an oven and mixer, which you have been using for your home-based business and will now start using in the bakery. You estimate that the equipment is currently worth $6,000, and you transfer the equipment into the business in exchange for additional common stock. The equipment has a 5-year useful life.

July 13: Pay $200 for business cards/flyers/posters/ads to use for advertising.

July 14: Pay $300 for office supplies.

July 15: Hire part-time helper to be paid $12 per hour. Pay periods are the 1st through the 15th and 16th through the end of the month, with paydays being the 20th for the first pay period and the 5th of the following month for the second pay period. (No entry is required on this date; it is here for informational purposes only.)

July 30: Received telephone bill for July in amount of $75. Payment is due on August 10.

July 31: Pay $2,400 for a 12-month insurance policy. Policy effective dates are August 1, 2018, through July 31, 2019.

July 31: Accrue wages earned for employee for period of 16th through 31st of July (Wage calculations table provided below)

July 31: Total July bakery sales were $15000. $5000 of these sales are on accounts receivable.

Wage calculation Data: Month Hours Rate Pay

July 31 10 12 120

Aug 15 40 12 480

Aug 31 35 12 420

Sept 15 38 12 456

Sept 30 40 12 480

Answer 1

S.No.	Date	Particulars	DEBIT ($)	CREDIT ($)
a.)	July 1, 2018	No entry will be made in the books of business. As the transaction is of personal nature.
b.)	July 1, 2018	Purchases A/C     Dr.      To supplier A/C	6,500	6,500
c.)	July 3, 2018	Cash A/C     Dr.      To 6% Note payables A/C	10,000	10,000
d.)	July 7, 2018	Security for Rental Lease A/C     Dr.      To Cash A/C	1,500	1,500
	July 31, 2018	Rent Expenses A/C     Dr.      To Outstanding Rent A/C	1,500	1,500
e.)	July 10, 2018	License fees A/C Dr.      To Cash A/C	375	375
f.)	July 11, 2018	Miscellaneous Expenses A/C     Dr.      To Cash A/C (Cash register purchased)	250	250
g.)	July 13, 2018	Oven And Mixer A/c     Dr.      To Common Stock A/C	6,000	6,000
h.)	July 13, 2018	Advertising Expenses A/C     Dr.      To Cash A/C	200	200
i.)	July 14, 2018	Office Expenses A/C     Dr.      To Cash A/C	300	300
j.)	July 31, 2018	No entry required Refer Note below.
k.)	July 30, 2018	Telephone Expenses A/C     Dr.      To Outstanding telephone expenses A/C	75	75
l.)	July 31, 2018	Prepaid Insurance A/C     Dr.      To Cash A/C	2,400	2,400
m.)	July 31, 2018	Wage expenses A/C    Dr.      To Accrued Wages A/C	120	120
n.)	July 31, 2018	Cash A/C     Dr. Sundry Receivables A/C     Dr.      To Sales A/C	10,000 5,000	15,000

Note: Wage expenses incurred are for the period – 16^th to the rest of the month as the helper is hired on 15^th of the month.