11 Cash $3,920 41 Fees Earned $6,200 12 Accounts Receivable 50 Wages Expense 51 Office Rent Expense 52 Equipment Rent Expense 53 Utilities Expense 54 Music Expense 55 Advertising Expense 56 Supplies Expense 59 Miscellaneous Expense 1,000 400 14 Supplies 15 Prepaid Insurance 17 Office Equipment 21 Accounts Payable 170 800 675 300 250 1,590 23 Unearned Revenue 500 31 Peyton Smith, Capital 32 Peyton Smith, Drawing 4,000 180 500 415
The transactions completed by PS Music during June 2019 were
described at the end of Chapter. The following transactions were
completed during July, the second month of the business's operations:
July 1. Peyton Smith made an additional investment in PS Music by
depositing $5,000 in PS Music's checking account.
Instead of continuing to share office space with a local real estate
agency, Peyton decided to rent office space near a local music store. Paid
rent for July, $1,750.
1. Paid a premium of $2,700 for a comprehensive insurance policy
covering liability, theft, and fire. The policy covers a one-year period.
2. Received $1,000 cash from customers on account.
3. On behalf of PS Music, Peyton signed a contract with a local radio
station, KXMD, to provide guest spots for the next three months. The
contract requires PS Music to provide a guest disc jockey for 80 hours
per month for a monthly fee of $3,600. Any additional hours beyond 80
will be billed to KXMD at $40 per hour. In accordance with the contract,
Peyton received $7,200 from KXMD as an advance payment for the first
two months.
3. Paid $250 to creditors on account.
4. Paid an attorney $900 for reviewing the July 3 contract with KXMD.
(Record as Miscellaneous Expense.)
5. Purchased office equipment on account from Office Mart, $7,500.
8. Paid for a newspaper advertisement, $200.
11. Received $1,000 for serving as a disc jockey for a party.
13. Paid $700 to a local audio electronics store for rental of digital
recording equipment.
14. Paid wages of $1,200 to receptionist and part-time assistant.
Enter the following transactions on Page 2 of the two-column journal:
16. Received $2,000 for serving as a disc jockey for a wedding
reception.
18. Purchased supplies on account, $850.
July 21. Paid $620 to Upload Music for use of its current music demos in
making various music sets.
22. Paid $800 to a local radio station to advertise the services of PS
Music twice daily for the remainder of July.
23. Served as disc jockey for a party for $2,500. Received $750, with the
remainder due August 4, 2019.
27. Paid electric bill, $915.
27. Paid electric bill, $915.
28. Paid wages of $1,200 to receptionist and part-time assistant.
29. Paid miscellaneous expenses, $540.
30. Served as a disc jockey for a charity ball for $1,500. Received $500,
with the remainder due on August 9, 2019.
31. Received $3,000 for serving as a disc jockey for a party.
31. Paid $1,400 royalties (music expense) to National Music Clearing for
use of various artists' music during July.
31. Withdrew $1,250 cash from PS Music for personal use.
PS Music's chart of accounts and the balance of accounts as of July 1,
2019 (all normal balances), are as attached:
Instructions
1. Enter the July 1, 2019, account balances in the appropriate
balance column of a four-column account. Write Balance in the
Item column and place a check mark (V) in the Posting Reference
column. (Hint: Verify the equality of the debit and credit balances
in the ledger before proceeding with the next instruction.)
2. Analyze and journalize each transaction in a two-column journal
beginning on Page 1, omitting
3. Post the journal to the ledger, extending the account balance to
the appropriate balance column after each posting.
4. Prepare an unadjusted
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