Question

FINANCIAL ACCOUNTING REQUIRED JOURNAL ENTRY PROBLEM

Kelly Luwin started a software development business as a sole proprietorship DBA Kellco on 1 /1/XX. During the month of January, the company had the following transactions:

1/1      The owner invested $80,000 cash into the business checking account. In addition, she obtained a business credit card from the same bank.

            1/2   Office space was rented for $2,800 per month and one

month's rent was paid in cash. In addition, $2,800 in cash was paid as a security deposit on the office space.

1/3   A phone system was purchased for $1,500 and installed. The

firm received an invoice from the company that installed the     

system for the full amount due and payable on 1/31.

            1/4   A computer server system was purchased for $15,000. $3,000 was paid in

cash and a 120-day note with an interest rate of 8% per annum was

signed for the balance owed.

                    

1/7      Sent a bill to a client for $5,000 for software development that had been completed. The terms for payment were “due on receipt”.

1/10    A contract to develop software for a client in the amount of $20,000 was

            entered into by Kellco. Kellco received $5,000 in cash as a prepayment.

             

1/15    Purchased office supplies in the amount of $325 using the firm's business credit card as payment.

            1/18 Kellco issued a purchase order to buy office furniture in the amount of

$7,500.

            1/20 Paid an accountant by check $1,500 to set up an accounting system.

            1/25 Issued a check to P.G. & E in the amount of $300 to pay for

              the owner’s personal utility bill.

            1/28 Collected $5,000 from the 1/7 transaction.

           

            1/31 Paid the bill received on 1/3

            1/31 Received a credit card bill for the purchase on 1/15.

Required: Make the necessary journal entries from the information given. Omit the journal descriptions.

Answer 1