Question

Description of transaction

Transaction	Description of transaction
01.	June 1: Byte of Accounting, Inc. issued 2,610 shares of its common stock to Jeremy after $24,380 in cash and computer equipment with a fair market value of $35,650 were received.
02.	June 1: Byte of Accounting, Inc. issued 1,839 shares of its common stock after acquiring from Courtney $28,750 in cash, computer equipment with a fair market value of $12,880 and office equipment with a fair value of $667.
03.	June 1:   Byte of Accounting, Inc. acquired $73,600 in cash from JOE ORZA and issued 3,200 shares of its common stock.
04.	June 2: A down payment of $33,000 in cash was made on additional computer equipment that was purchased for $165,000. A five-year note was executed by Byte for the balance.
05.	June 4: Additional office equipment costing $400 was purchased on credit from Discount Computer Corporation.
06.	June 8: Unsatisfactory office equipment costing $80 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte.
07.	June 10: Byte paid $25,250 on the balance it owed on the June 2 purchase of computer equipment.
08.	June 14: A one-year insurance policy covering its computer equipment was purchased by Byte for $5,640 in cash. The effective date of the policy was June 16.
09.	June 16: Computer consultation revenue of $7,250 was received.
10.	June 16: Byte purchased a building and the land it is on for $149,000, to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $24,000. The balance of the cost is to be allocated to the building. Byte made a cash down payment of $14,900 and executed a mortgage for the balance. The mortgage is payable in eight equal annual installments beginning July 1.
11.	June 17: Cash of $3,200 was paid for rent for June and July. Put the total amount into the Prepaid Rent account.
12.	June 17: Received a bill of $400 from the local newspaper for advertising.
13.	June 21: Billed various miscellaneous local customers $4,300 for consulting services performed.
14.	June 21: A fax machine for the office was purchased for $875 cash.
15.	June 21: Accounts payable in the amount of $320 were paid.
16.	June 22: Paid the advertising bill that was received on June 17.
17.	June 22: Received a bill for $1,290 from Computer Parts and Repair Co. for repairs to the computer equipment.
18.	June 22: Paid salaries of $935 to equipment operators for the week ending June 18.
19.	June 23: Cash in the amount of $3,445 was received on billings.
20.	June 23: Purchased office supplies for $705 on credit. Record the purchase as an increase to the assets.
21.	June 28: Billed $5,280 to miscellaneous customers for services performed to June 25.
22.	June 29: Cash in the amount of $5,001 was received for billings.
23.	June 29: Paid the bill received on June 22, from Computer Parts and Repairs Co.
24.	June 29: Paid salaries of $935 to equipment operators for the week ending June 25.
25.	June 30: Received a bill for the amount of $890 from O & G Oil and Gas Co.
26.	June 30: Paid a cash dividend of $0.15 per share to the three shareholders of Byte. [IMPORTANT NOTE: The number of shares of capital stock outstanding can be determined from the first three transactions.]

Journalize the Transactions

Answer 1

Solution

Byte of Accounting Inc

General Journal Entries:

Date	Account Titles and Explanation	Ref. No.	Debit	Credit
1-Jun	Cash		$24,380
	Computer Equipment		$35,650
	Common Stock			$60,030
	(To record issue of common stock for cash and computer equipment)
1-Jun	Cash		$28,750
	Computer Equipment		$12,880
	Office Equipment		$667
	Common Stock			$42,297
	(issue of common stock against cash, computer equipment and office equipment)
1-Jun	Cash		$73,600
	Common Stock			$73,600
	(to record issue of common stock against cash)
2-Jun	Computer Equipment		$165,000
	Cash			$33,000
	Notes Payable			$132,000
	(To record purchase of computer equipment partly with cash and issue of 5-year note)
4-Jun	Office Equipment		$400
	Accounts Payable			$400
	(Purchase of office equipment on account)
8-Jun	Accounts Payable		$80
	Office Equipment			$80
	(To record return of unsatisfied office equipment)
10-Jun	Notes Payable		$25,250
	Cash			$25,250
	(To record payment towards notes payable)
14-Jun	Prepaid Insurance		$5,640
	Cash			$5,640
	(To record purchase of 1-year insurance policy)
16-Jun	Cash		$7,250
	Computer Consultation Revenue			$7,250
	(To record cash received for consultation services)
16-Jun	Building		$125,000
	Land		$24,000
	Cash			$14,900
	Mortgage Payable			$134,100
	(To record purchase of land and building partly for cash and mortgage)
17-Jun	Prepaid Rent		$3,200
	Cash			$3,200
	(To record payment of 2-month rent in advance)
17-Jun	Advertising Expenses		$400
	Advertising Payable			$400
	(To record advertising expenses payable)
21-Jun	Accounts Receivable		$4,300
	Computer Consultation Revenue			$4,300
	(To record customers billed for services performed)
21-Jun	Office Equipment		$875
	Cash			$875
	(To record purchase of fax machine)
21-Jun	Accounts Payable		$320
	Cash			$320
	(Payment towards accounts payable)
22-Jun	Advertising Payable		$400
	Cash			$400
	(To record payment of advertising expense)
22-Jun	Repairs and Maintenance Expense		$1,290
	Repairs and Maintenance Payable			$1,290
	(To record repairs and maintenance bill received)
22-Jun	Salaries Expense		$935
	Cash			$935
	(To record payment of salaries)
23-Jun	Cash		$3,445
	Accounts Receivable			$3,445
	(To record cash received from customers)
23-Jun	Office Supplies		$705
	Accounts Payable			$705
	(To record purchase of supplies)
28-Jun	Accounts Receivable		$5,280
	Computer Consultation Revenue			$5,280
	(To record customers billed for services performed)
29-Jun	Cash		$5,001
	Accounts Receivable			$5,001
	(To record receipt of cash)
29-Jun	Repairs and Maintenance Payable		$1,290
	Cash			$1,290
	(repairs and maintenance expense paid)
29-Jun	Salaries Expense		$935
	Cash			$935
	(To record salaries paid)
30-Jun	Fuel Expenses		$890
	Fuel Payable			$890
	(bill for fuel expenses received)
30-Jun	Dividends		$1,147.35
	Cash			$1,147.35
	(To record dividends at $0.15 paid on 7,649 shares (2,610 + 1,839 + 3,200) outstanding)