Question

Saved On April 1, 2018, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company's first month. April 1 Nozomi invested $34,000 cash and computer equipment worth $20,000 in the company in exchange for common stock. 2 The company rented furnished office space by paying $2,300 cash for the first month'a (April) rent. 3 The company purchased $1,100 of office supplies for cash. 10 The company paid $2,600 cash for the premium on a 12-month insurance policy. Coverage begins on April 11. 14 The company paid $800 cash for two weeks' salaries earned by employees. 24 The company collected $13,000 cash on commissions from airlines on tickets obtained for customers. 28 The company paid $800 cash for two weeks' salaries earned by employees. 29 The company paid $450 cash for minor repairs to the company's computer. 30 The company paid $1,150 cash for this month's telephone bill. 30 The company paid $2,300 cash in dividends. The company's chart of accounts follows: 101 Cash 106 Accounts Receivable 124 Office Supplies 128 Prepaid Insurance 167 Computer Equipment 168 Accumulated Depreciation Computer Equip. 209 Salaries Payable 307 Common Stock 318 Retained Earnings 319 Dividends 405 Commissions Earned 612 Depreciation Expense-Computer Equip. 622 Salaries Expense 637 Insurance Expense 640 Rent Expense 650 Office Supplies Expense 684 Repairs Expense 688 Telephone Expense 901 Income Summary Use the following information: a. Two-thirds (or $144) of one month's insurance coverage has expired. b. At the end of the month. $600 of office supplies are still available. c. This month's depreciation on the computer equipment is $500. d. Employees earned $460 of unpaid and unrecorded salaries as of month-end e. The company earned $2,100 of commissions that are not yet billed at month-end Required: 1. & 2. Prepare lournal entries to record the transactions for April and post them to the ledger accounts in Requirement 66. The gland.NDRAR tome in balance chantante Score answer >

Answer 1

Prepare journal entries as follows:

Date	Account Titles	Debit	Credit
April
1	Cash	$34,000
	Computer equipment	$20,000
	Common stock		$54,000
2	Rent expense	$2,300
	Cash		$2,300
3	Office supplies	$1,100
	Cash		$1,100
10	Prepaid insurance	$2,600
	Cash		$2,600
14	Salaries expense	$800
	Cash		$800
24	Cash	$13,000
	Commission earned		$13,000
28	Salaries expense	$800
	Cash		$800
29	Repair expense	$450
	Cash		$450
30	Telephone expense	$1,150
	Cash		$1,150
30	Dividend	$2,300
	Cash		$2,300

_____________________________________________________________

Prepare Adjusting entries as follows:

Trn	Account Titles	Debit	Credit
a	Insurance expense	$144
	Prepaid insurance		$144
b	Office supplies expense ($1100-$600)	$500
	Office supplies		$500
c	Depreciation expense-computer equip.	$500
	Accumulated depreciation -computer equip.		$500
d	Salaries expense	$460
	Salaries payable		$460
e	Accounts receivable	$2,100
	Commission earned		$2,100

______________________________________________________________________

Prepare closing entries as follows:

Date	Account Titles	Debit	Credit
April 30	Commission earned ($13,000 + $2100)	$15,100
	Income summary		$15,100
April 30	Income summary	$7,104
	Salaries expense ($800+$800+$460)		$2,060
	Rent expense		$2,300
	Office supplies expense		$500
	Insurance expense		$144
	Repair expense		$450
	Telephone expense		$1,150
	Depreciation expense-computer equip.		$500
April 30	Income summary ($15100-$7104)	$7,996
	Retained earnings		$7,996
April 30	Retained earnings	$2,300
	Dividends		$2,300

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