After researching the different forms of business organization, Larry decides to operate "LLM" as a corporation. He then starts the process of getting the business running. In April 2020, the following activities take place. April: 8 He opens a bank account under the name "LLM" and transfers $500 from his personal account to the new account in exchange for common stock. Larry pays $65 to have advertising brochures and posters printed. He plans to distribute these as opportunities arise. (Hint: Use Advertising Expense.) He buys lawn care supplies for $125 cash. Larry buys a lawn mower that originally cost him $1,750. Larry realizes that his initial cash investment is not enough. His grandmother lends him $2,000 cash, for which Larry signs a note payable in the name of the business. Larry deposits the money in the business bank account. (Hint: The note does not have to be repaid for 24 months. As a result, the notes payable should be reported in the accounts as the last liability and also on the balance sheet as the last liability.) He buys more equipment for $900 cash. He mows his first lawn and collects $125 cash. Larry books his second lawn for May 4th for $150. He receives $30 cash in advance as a down payment. Larry pays $1,320 for a one-year insurance policy that will expire on December 1, 2020. 11 13 14 16 17 20 25 30 Instructions (a) Prepare journal entries to record the April transactions. (b) Post the journal entries to general ledger accounts, using T-accounts. (c) Prepare a trial balance at April 30.
After researching the different forms of business organization, Larry decides to operate "LLM" as a corporation. He then starts the process of getting the business running. In April 2020, the following activities take place. April: 8 He opens a bank account under the name "LLM" and transfers $500 from his personal account to the new account in exchange for common stock. Larry pays $65 to have advertising brochures and posters printed. He plans to distribute these as opportunities arise. (Hint: Use Advertising Expense.) He buys lawn care supplies for $125 cash. Larry buys a lawn mower that originally cost him $1,750. Larry realizes that his initial cash investment is not enough. His grandmother lends him $2,000 cash, for which Larry signs a note payable in the name of the business. Larry deposits the money in the business bank account. (Hint: The note does not have to be repaid for 24 months. As a result, the notes payable should be reported in the accounts as the last liability and also on the balance sheet as the last liability.) He buys more equipment for $900 cash. He mows his first lawn and collects $125 cash. Larry books his second lawn for May 4th for $150. He receives $30 cash in advance as a down payment. Larry pays $1,320 for a one-year insurance policy that will expire on December 1, 2020. 11 13 14 16 17 20 25 30 Instructions (a) Prepare journal entries to record the April transactions. (b) Post the journal entries to general ledger accounts, using T-accounts. (c) Prepare a trial balance at April 30.
Chapter1: Financial Statements And Business Decisions
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Problem 1Q
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Transcribed Image Text:**Larry’s Lawn Mowing Corp. (aka LLM Corp.)**
**Introduction:**
After researching different forms of business organization, Larry decides to operate "LLM" as a corporation. He then starts the process of getting the business running. In April 2020, the following activities take place.
**April Activities:**
- **April 8:**
- Larry opens a bank account under the name “LLM” and transfers $500 from his personal account to the new account in exchange for common stock.
- **April 11:**
- Larry pays $65 to have advertising brochures and posters printed. He plans to distribute these as opportunities arise.
- *(Hint: Use Advertising Expense.)*
- **April 13:**
- He buys lawn care supplies for $125 cash.
- **April 14:**
- Larry buys a lawn mower that originally cost him $1,750.
- **April 16:**
- Realizing that his initial cash investment is not enough, his grandmother lends him $2,000 cash, for which Larry signs a note payable in the name of the business. Larry deposits the money in the business bank account.
- *(Hint: The note does not have to be repaid for 24 months. As a result, the notes payable should be reported in the accounts as the last liability and also on the balance sheet as the last liability.)*
- **April 17:**
- He buys more equipment for $900 cash.
- **April 20:**
- He mows his first lawn and collects $125 cash.
- **April 25:**
- Larry books his second lawn for May 4th for $150. He receives $30 cash in advance as a down payment.
- **April 30:**
- Larry pays $1,320 for a one-year insurance policy that will expire on December 1, 2020.
**Instructions:**
(a) Prepare journal entries to record the April transactions.
(b) Post the journal entries to general ledger accounts, using T-accounts.
(c) Prepare a trial balance at April 30.
*Copyright © 2015 John Wiley & Sons, Inc.*
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