Question

Aracel Engineering completed the following transactions in the month of June.

Please prepare a general journal AND General Ledger that include account explanations.

a.	Jenna Aracel, the owner, invested $100,000 cash, office equipment with a value of $5,000, and $60,000 of drafting equipment to launch the company.
b.	The company purchased land worth $49,000 for an office by paying $6,300 cash and signing a long-term note payable for $42,700.
c.	The company purchased a portable building with $55,000 cash and moved it onto the land acquired inb.
d.	The company paid $3,000 cash for the premium on an 18-month insurance policy.
e.	The company completed and delivered a set of plans for a client and collected $6,200 cash.
f.	The company purchased $20,000 of additional drafting equipment by paying $9,500 cash and signing a long-term note payable for $10,500.
g.	The company completed $14,000 of engineering services for a client. This amount is to be received in 30 days.
h.	The company purchased $1,150 of additional office equipment on credit.
i.	The company completed engineering services for $22,000 on credit.
j.	The company received a bill for rent of equipment that was used on a recently completed job. The $1,333 rent cost must be paid within 30 days.
k.	N/A Ignore this.
l.	The company paid $1,200 cash for wages to a drafting assistant.
m.	N/A Ignore this.
n.	The company paid $925 cash for minor maintenance of its drafting equipment.
o.	Jenna Aracel withdrew $9,480 cash from the company for personal use.
p.	The company paid $1,200 cash for wages to a drafting assistant.
q.	The company paid $2,500 cash for advertisements on the Web during June.

Answer 1

a.	Cash	100,000
	Office Equipment	5,000
	Drafting Equipment	60,000
	J. Aracel, Capital		165,000
	Owner invested cash and equipment.
b.	Land	49,000
	Cash		6,300
	Note Payable		42,700
	Purchased land with cash and note payable.
c.	Building	55,000
	Cash		55,000
	Purchased building.
d.	Prepaid Insurance	3,000
	Cash		3,000
	Purchased 18-month insurance policy.
e.	Cash	6,200
	Engineering Fees Earned		6,200
	Collected cash for completed work.
f.	Drafting Equipment	20,000
	Cash		9,500
	Note Payable		10,500
	Purchased equipment with cash and note payable.
g.	Accounts Receivable	14,000
	Engineering Fees Earned		14,000
	Completed services for client.
h.	Office Equipment	1,150
	Accounts Payable		1,150
	Purchased equipment on credit.
i.	Accounts Receivable	22,000
	Engineering Fees Earned		22,000
	Billed client for completed work.
j.	Equipment Rental Expense	1,333
	Accounts Payable		1,333
	Incurred equipment rental expense.
k.	Cash	7,000
	Accounts Receivable		7,000
	Collected cash on account.
l.	Wages Expense	1,200
	Cash		1,200
	Paid assistant’s wages.
m.	Accounts Payable	1,150
	Cash		1,150
	Paid amount due on account.
n.	Repairs Expense	925
	Cash		925
	Paid for repair of equipment.
o.	J. Aracel, Withdrawals	9,480
	Cash		9,480
	Owner withdrew cash for personal use.
p.	Wages Expense	1,200
	Cash		1,200
	Paid assistant’s wages.
q.	Advertising Expense	2,500
	Cash		2,500
	Paid for advertising expense.