Question

Prepare a "T" account depiction of the Company's General Ledger activity for the month of January 2020

1. On January 1, 2020, the owner of ACC invested $10,000.00 cash in the company.

2. An invoice was received from ACC's insurance provider on January 15, 2020, for casualty insurance coverage in the amount of $2,400.00 for the period January 1, through December 31, 2020.

3. Employees earned salary and wages in January of $6,500.00 which was paid on February 1, 2020.

4. The insurance premium described in transaction 2 was paid on January 31, 2020.

5. Office expense for the month of January paid in cash was $1,500.00 6. Record insurance expenses for the month of January. 7. January's service revenue for the Company is $21,000.00. All revenues are recorded as "on account."

Answer 1

Solution:

Cash
1	$          10,000	4	$             2,400
		5	$             1,500
End Balance	$            6,100
Common Stock
		1	$           10,000
		End Balance	$           10,000
Salaries Payable
		3	$             6,500
		End Balance	$             6,500
Salaries Expense
3	$            6,500
End Balance	$            6,500
Service Revenue
		7	$           21,000
		End Balance	$           21,000
Accounts Receivable
7	$          21,000
End Balance	$          21,000
Prepaid Insurance
4	$            2,400	6	$                 200
End Balance	$            2,200
Office Expense
5	$            1,500
End Balance	$            1,500
Insurance Expense
6	$                200
End Balance	$                200

Notes:

1) January 15th, an invoice was received relating to insurance and payment was not made. So, No need to post such information into T Accounts. Insurance was paid on January 31st, we will record that entry and post to T Accounts