Scenario: For the past several years, Angela Smith operated a part-time consulting business from her home. As of September 1, 2020, Angela decided to move to rented quarters and to operate the business on a full-time basis. She has registered the business as Interactive Consulting Ltd but has no prior knowledge of accounting and has approached a member of your group for advice. The company entered the following transactions during September: Sept 1 - The following assets were received from Angela Smith in exchange for capital of Interactive Consulting Ltd: cash - $7,050, accounts receivable - $1,500, supplies - $1,250, and office equipment - $7,200. There were no liabilities received. Sept 2 -Paid three (3) months rent on a lease rental contract, $3,600. Sept 3 -Paid the premiums on the property and peril insurance policies, $1,500. Sept 4 - Received cash from clients as an advance payment for services to be provided in the coming months, $3,500. Sept 5 -Purchased additional office equipment on account from Payne Company, $1,800. Sept 6 -Received cash from clients on account, $800. Sept 10 - Paid cash for newspaper advertisement, $120. Sept 12 - Paid Payne Company a portion of the debt incurred on September 5, $800. Sept 12 - Recorded services provided on account for the period September 1 -12, $1,200. Sept 13 - Paid part-time receptionist for two weeks’ salary, $400. Sept 17 - Recorded cash from cash clients for fees earned during the first half of September, $2,100. Sept 18 - Paid cash for supplies, $750. Sept 20 - Recorded services provided on account for the period September 13-20, $1,100. Sept 24 - Recorded cash from cash clients for fees earned for the period September 17-24, $1,850. Sept 25 - Received cash from clients on account, $1,300. Sept 27 - Paid part-time receptionist for two weeks salary, $400. Sept 29 - Paid telephone bill for September, $130. Sept 30 - Paid electricity bill for September, $200. Sept 30 - Recorded cash from cash clients for fees earned for the period September 25-30, $1,050. Sept 30 - Recorded services provided on account for the remainder of September, $500. Additionally: The company presented the following adjustments: Insurance expired during September, $125. Supplies on hand on September 30, $1,250. Accrued receptionist salary on September 30, $120 Rent expired during September, $800. Unearned fees on September 30 are $1,200. Requirement: Prepare the adjusting entries in the general journal (narration required for each journal entry) and post the adjusting entries to their respective ledger accounts
Scenario:
For the past several years, Angela Smith operated a part-time consulting business from her home. As of September 1, 2020, Angela decided to move to rented quarters and to operate the business on a full-time basis. She has registered the business as Interactive Consulting Ltd but has no prior knowledge of accounting and has approached a member of your group for advice. The company entered the following transactions during September:
Sept 1 - The following assets were received from Angela Smith in exchange for capital of Interactive Consulting Ltd: cash - $7,050,
Sept 2 -Paid three (3) months rent on a lease rental contract, $3,600.
Sept 3 -Paid the premiums on the property and peril insurance policies, $1,500.
Sept 4 - Received cash from clients as an advance payment for services to be provided in the coming months, $3,500.
Sept 5 -Purchased additional office equipment on account from Payne Company, $1,800.
Sept 6 -Received cash from clients on account, $800.
Sept 10 - Paid cash for newspaper advertisement, $120.
Sept 12 - Paid Payne Company a portion of the debt incurred on September 5, $800.
Sept 12 - Recorded services provided on account for the period September 1 -12, $1,200.
Sept 13 - Paid part-time receptionist for two weeks’ salary, $400.
Sept 17 - Recorded cash from cash clients for fees earned during the first half of September, $2,100.
Sept 18 - Paid cash for supplies, $750.
Sept 20 - Recorded services provided on account for the period September 13-20, $1,100.
Sept 24 - Recorded cash from cash clients for fees earned for the period September 17-24, $1,850.
Sept 25 - Received cash from clients on account, $1,300.
Sept 27 - Paid part-time receptionist for two weeks salary, $400.
Sept 29 - Paid telephone bill for September, $130.
Sept 30 - Paid electricity bill for September, $200.
Sept 30 - Recorded cash from cash clients for fees earned for the period September 25-30, $1,050.
Sept 30 - Recorded services provided on account for the remainder of September, $500.
Additionally:
The company presented the following adjustments:
- Insurance expired during September, $125.
- Supplies on hand on September 30, $1,250.
- Accrued receptionist salary on September 30, $120
- Rent expired during September, $800.
- Unearned fees on September 30 are $1,200.
Requirement:
Prepare the
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