Question

Halogen Laminated Products Company began business on January 1, 2021. During January, the following transactions occurred: Jan. 1 Issued common stock in exchange for $105,000 cash. 2 Purchased inventory on account for $40,000 (the perpetual inventory system is used). 4 Paid an insurance company $3,000 for a one-year insurance policy. Prepaid insurance was debited for the entire amount. 10 Sold merchandise on account for $12,500. The cost of the merchandise was $7,500. 15 Borrowed $35,000 from a local bank and signed a note. Principal and interest at 10% is to be repaid in six months. 20 Paid employees $6,500 salaries for the first half of the month. 22 Sold merchandise for $10,500 cash. The cost of the merchandise was $6,500. 24 Paid $15,500 to suppliers for the merchandise purchased on January 2. 26 Collected $6,250 on account from customers. 28 Paid $1,200 to the local utility company for January gas and electricity. 30 Paid $4,500 rent for the building. $2,250 was for January rent, and $2,250 for February rent. Prepaid rent and rent expense were debited for their appropriate amounts. Required: 1. Prepare general journal entries to record each transaction. 2. Post the transactions into the appropriate T-accounts. 3. Prepare an unadjusted trial balance as of January 30, 2021.

Answer 1

Journal Entries
Date	Particulars			Debit	Credit
1-Jan	Cash			$ 105,000.00
	To Common Stock				$ 105,000.00
2-Jan	Inventory			$   40,000.00
	To Accounts Payable				$   40,000.00
4-Jan	Prepaid Insurance			$     3,000.00
	To Cash				$     3,000.00
10-Jan	Accounts Receivable			$   12,500.00
	To Sales				$   12,500.00
	Cost of Goods Sold			$     7,500.00
	To Inventory				$     7,500.00
15-Jan	Cash			$   35,000.00
	To Notes Payable				$   35,000.00
20-Jan	Salaries and Wages Expense			$     6,500.00
	To Cash				$     6,500.00
22-Jan	Cash			$   10,500.00
	To Sales				$   10,500.00
	Cost of Goods Sold			$     6,500.00
	To Inventory				$     6,500.00
24-Jan	Accounts Payable			$   15,500.00
	To Cash				$   15,500.00
26-Jan	Cash			$     6,250.00
	To Accounts Receivable				$     6,250.00
28-Jan	Utilities Expense			$     1,200.00
	To Cash				$     1,200.00
30-Jan	Rent Expense			$     2,250.00
	Prepaid Rent			$     2,250.00
	To Cash				$     4,500.00

Cash					Common Stock					Inventory					Accounts Payable
1-Jan	$ 105,000.00	4-Jan	$     3,000.00		End. Bal	$ 105,000.00	1-Jan	$ 105,000.00		2-Jan	$ 40,000.00	10-Jan	$   7,500.00		24-Jan	$ 15,500.00	2-Jan	$ 40,000.00
15-Jan	$   35,000.00	20-Jan	$     6,500.00									22-Jan	$   6,500.00		End. Bal	$ 24,500.00
22-Jan	$   10,500.00	24-Jan	$   15,500.00									End. Bal	$ 26,000.00
26-Jan	$     6,250.00	28-Jan	$     1,200.00
		30-Jan	$     4,500.00
		End. Bal	$ 126,050.00
Prepaid Insurance					Accounts Receivable					Cost of Goods sold					Notes Payable
4-Jan	$     3,000.00	End. Bal.	$     3,000.00		10-Jan	$   12,500.00	26-Jan	$     6,250.00		10-Jan	$   7,500.00	End. Bal	$ 14,000.00		End. Bal	$ 35,000.00	15-Jan	$ 35,000.00
							End. Bal	$     6,250.00		22-Jan	$   6,500.00
Salaries and Wages Expense					Sales					Utilities Expense					Rent Expense
20-Jan	$     6,500.00	End. Bal	$     6,500.00		End. Bal	$   23,000.00	10-Jan	$   12,500.00		28-Jan	$   1,200.00	End. Bal	$   1,200.00		30-Jan	$   2,250.00	End. Bal	$   2,250.00
							22-Jan	$   10,500.00
Prepaid Rent
30-Jan	$     2,250.00	End. Bal	$     2,250.00

Unadjusted Trial Balance
Particulars			Debit	Credit
Cash			$ 126,050.00
Accounts Receivable			$     6,250.00
Inventory			$   26,000.00
Prepaid Insurance			$     3,000.00
Prepaid Rent			$     2,250.00
Accounts Payable				$   24,500.00
Notes Payable				$   35,000.00
Common Stock				$ 105,000.00
Sales				$   23,000.00
Cost of Goods sold			$   14,000.00
Salaries and Wages Expense			$     6,500.00
Utilities Expense			$     1,200.00
Rent Expense			$     2,250.00
			$ 187,500.00	$ 187,500.00