Question

Create a journal entry, t account and trial balanceMaquoketa Services was formed on May 1, 2017. The following transactions took place during the first month.

Transactions on May 1:1. Jay BradFord invested $40,000 cash in the company, as its sole owner.2. Hired two employees to work in the warehouse. They will each be paid a salary of $2,500 per month.3. Signed a 2-year rental agreement on a warehouse; paid $24,000 cash in advance for the first year.4. Purchased furniture and equipment costing $33,000. A cash payment of $12,000 was made immediately; the remainder will be paid in 6 months.5. Paid $1,600 cash for a one-year insurance policy on the furniture and equipment.Transactions during the remainder of the month:6. Purchased basic office supplies for $600 cash.7. Purchased more office supplies for $1,600 on account.8. Total revenues earned were $21,000—$8,000 cash and $13,000 on account.9. Paid $400 to suppliers for accounts payable due.10. Received $2,800 from customers in payment of accounts receivable.11. Received utility bills in the amount of $400, to be paid next month.12. Paid the monthly salaries of the two employees, totaling $5,000.

Answer 1

Total balance of debit in trial balance = Total balance of credit in trial balance

Step-by-step explanation:

Maquoketa service

Journal entry

1. Dr Cash 40000

Cr Capital- Jayford 40000

(Investment in company)

2. Dr Salary expense 5000

Cr Salary payable 5000

(Salary expense for the m/o of may-2017 @$2500 each)

3. Dr prepaid rent 24000

Cr Cash 24000

( Paid advance rent for warehouse)

4. Dr Furniture and equipment 33000

Cr Cash 12000

Cr Accounts payable 21000

(Purchase furniture and equipment on cash and on account)

5. Dr Prepaid insurance 1600

Cr Cash 1600

( Purchase one year insurance policy of furniture ad equipment)

6. Dr office supplies 600

Cr Cash 600

(Purchase basic office supplies)

7. Dr Office supplies 1600

Cr Accounts payable 1600

( Purchase office supplies on account)

8. Dr Cash 8000

Dr Account receivable 13000

Cr Sales revenue 21000

( Revenue earned on cash and on account)

9. Dr Accounts payable 400

Cr Cash 400

( Paid cash to supplier)

10. Dr Cash 2800

Cr Account receivable 2800

( Received cash from customer which was due)

11. Dr Utilities expense 400

Cr utilities payable 400

( utility expense for the month)

12. Dr Salary payable 5000

Cr Cash 5000

(Paid salary of 2 employee).

Maquoketa service

T-account

Cash Capital - Jayford

Dr___________Cr____ DR ___________CR

40000 ---- 24000 ----- 40000

---- 12000

--- 1600

--- 600

8000 --- 400

2800 --- 5000

Salary expense Salary payable

Dr____________Cr______ DR ___________Cr

5000 ---- 5000 ------5000

Prepaid rent Furniture and equipment

Dr ____________Cr____ Dr _____________Cr

24000 ------ 33000 --------

Accounts payable Prepaid insurance

Dr_____________Cr___ Dr ___________Cr_

-------21000 1600 -----

------ 1600

400 -----

Office supplies Account receivable

Dr_____________Cr___ Dr ______________Cr

600 ----- 13000 ------

1600 ----- 2800

Utilities expense Utilities payable

Dr____________Cr___ Dr __________Cr__

400 ------ -------400

Sales revenue

Dr_______________Cr __________________

------21000 -------

Maquoketa Services

Trial Balance

Cash 7200 40000 Capital-Jayford

Salary expense 5000 Salary payable

Prepaid rent 24000 22200 Account payable

Furniture and Equipment 33000 400 Utilities payable

Prepaid insurance 1600 21000 Sales revenue

office supplies 2200

Account receivable 10200

utilities expense 400

Total Debits 83600 = 83600 Total credits