Journal entry is a medium of recording the business transactions carried during a particular accounting period.
Four Column Accounts:
The four column accounts keeps track of the balance as transactions takes place. In case of assets and expense accounts, the increase in the expenses and assets are shown in the debit column and vice-versa. When there is increase in liabilities and revenues, it is shown on the credit side and vice-versa.
A trial balance is a statement consisting of all the ledger accounts which is prepared at the end of accounting period.
To determine:
1. Prepare journal entries for the transactions which occurred during October and November.
2. Open the ledger accounts and post the journal entries into their concern accounts.
3. Prepare a trial balance for the month ended November.

Answer to Problem 8GLP
Solution:
1. The transactions of October and November are journalized.
2. The ledger accounts of Business Solutions are opened and the journal
3. The Trial balance as of the end of November shows a total debit and credit balance of $98,659.
Explanation of Solution
Explanation:
1. Journal entries
Date | Accounts | Debit | Credit |
Oct. | |||
1 | Cash | $45,000 | |
Computer Equipment | $20,000 | ||
Office Equipment | $8,000 | ||
S. Rey, Capital | $73,000 | ||
2 | Prepaid Rent | $3,300 | |
Cash | $3,300 | ||
3 | Computer Supplies | $1,420 | |
Accounts Payable | $1,420 | ||
5 | Prepaid Insurance | $2,220 | |
Cash | $2,220 | ||
6 | $4,800 | ||
Computer Service Revenue | $4,800 | ||
8 | Accounts Payable | $1,420 | |
Cash | $1,420 | ||
10 | No Entry | ||
12 | Accounts Receivable | $1,400 | |
Computer Service Revenue | $1,400 | ||
15 | Cash | $4,800 | |
Accounts Receivable | $4,800 | ||
17 | Repairs Expense – Computer | $805 | |
Cash | $805 | ||
20 | Advertising Expense | $1,728 | |
Cash | $1,728 | ||
22 | Cash | $1,400 | |
Accounts Receivable | $1,400 | ||
28 | Accounts Receivable | $5,208 | |
Computer Service Revenue | $5,208 | ||
31 | Wages Expense | $875 | |
Cash | $875 | ||
31 | S. Rey, Withdrawals | $3,600 | |
Cash | $3,600 | ||
Nov. | |||
1 | Mileage Expense | $320 | |
Cash | $320 | ||
2 | Cash | $4,633 | |
Computer Service Revenue | $4,633 | ||
5 | Computer Supplies | $1,125 | |
Cash | $1,125 | ||
8 | Accounts Receivable | $5,668 | |
Computer Service Revenue | $5,668 | ||
13 | No Entry Required | ||
18 | Cash | $2,208 | |
Accounts Receivable | $2,208 | ||
22 | Miscellaneous Expense | $250 | |
Cash | $250 | ||
24 | Accounts Receivable | $3,950 | |
Computer Service Revenue | $3,950 | ||
25 | No Entry Required | ||
28 | Mileage Expense | $384 | |
Cash | $384 | ||
30 | Wages Expense | $1,750 | |
Cash | $1,750 | ||
30 | S. Rey, Withdrawals | $2,000 | |
Cash | $2,000 | ||
2. Ledger Accounts
Cash Account No. 101 |
|||
Date | Debit | Credit | Balance |
Oct. 1 | $45,000 | $45,000 | |
2 | $3,300 | $41,700 | |
5 | $2,220 | $39,480 | |
8 | $1,420 | $38,060 | |
15 | $4,800 | $42,860 | |
17 | $805 | $42,055 | |
20 | $1,728 | $40,327 | |
22 | $1,400 | $41,727 | |
31 | $875 | $40,852 | |
31 | $3,600 | $37,252 | |
Nov. 1 | $320 | $36,932 | |
2 | $4,633 | $41,565 | |
5 | $1,125 | $40,440 | |
18 | $2,208 | $42,648 | |
22 | $250 | $42,398 | |
28 | $384 | $42,014 | |
30 | $1,750 | $40,264 | |
30 | $2,000 | $38,264 | |
Accounts Receivable Account No. 106 |
|||
Date | Debit | Credit | Balance |
Oct. 6 | $4,800 | $4,800 | |
12 | $1,400 | $6,200 | |
15 | $4,800 | $1,400 | |
22 | $1,400 | $0 | |
28 | $5,208 | $5,208 | |
Nov. 8 | $5,668 | $10,876 | |
18 | $2,208 | $8,668 | |
24 | $3,950 | $12,618 |
Computer Supplies Account No. 126 |
|||
Date | Debit | Credit | Balance |
Oct. 3 | $1,420 | $1,420 | |
Nov. 5 | $1,125 | $2,545 | |
Prepaid Insurance Account No. 128 |
|||
Date | Debit | Credit | Balance |
Oct. 5 | $2,220 | $2,220 | |
Prepaid Rent Account No. 131 |
|||
Date | Debit | Credit | Balance |
Oct. 2 | $3,300 | $3,300 | |
Office Equipment Account No. 163 |
|||
Date | Debit | Credit | Balance |
Oct. 1 | $8,000 | $8,000 | |
Computer Equipment Account No. 167 |
|||
Date | Debit | Credit | Balance |
Oct. 1 | $20,000 | $20,000 | |
Accounts Payable Account No. 201 |
|||
Date | Debit | Credit | Balance |
Oct. 3 | $1,420 | $1,420 | |
8 | $1,420 | $0 | |
S. Rey, Capital Account No. 301 |
|||
Date | Debit | Credit | Balance |
Oct. 1 | $73,000 | $73,000 | |
S. Rey, Withdrawals Account No. 302 |
|||
Date | Debit | Credit | Balance |
Oct. 31 | $3,600 | $3,600 | |
Nov. 30 | $2,000 | $5,600 | |
Computer Service Revenue Account No. 403 |
|||
Date | Debit | Credit | Balance |
Oct. 6 | $4,800 | $4,800 | |
12 | $1,400 | $6,200 | |
28 | $5,208 | $11,408 | |
Nov. 2 | $4,633 | $16,041 | |
8 | $5,668 | $21,709 | |
24 | $3,950 | $25,659 |
Wages Expense Account No. 623 |
|||
Date | Debit | Credit | Balance |
Oct. 31 | $875 | $875 | |
Nov. 30 | $1,750 | $2,625 | |
Advertising Expense Account No. 655 |
|||
Date | Debit | Credit | Balance |
Oct. 20 | $1,728 | $1,728 | |
Mileage Expense Account No. 676 |
|||
Date | Debit | Credit | Balance |
Nov. 1 | $320 | $320 | |
28 | $384 | $704 | |
Miscellaneous Expense Account No. 677 |
|||
Date | Debit | Credit | Balance |
Nov. 22 | $250 | $250 | |
Repairs Expense – Computer Account No. 684 |
|||
Date | Debit | Credit | Balance |
Oct. 17 | $805 | $805 | |
3. Trial Balance
BUSINESS SOLUTIONS Trial Balance For the Month Ended November 30 |
||
Cash | $38,264 | |
Accounts Receivable | $12,618 | |
Computer Supplies | $2,545 | |
Prepaid Insurance | $2,220 | |
Prepaid Rent | $3,300 | |
Office Equipment | $8,000 | |
Computer Equipment | $20,000 | |
Accounts Payable | - | |
S. Rey, Capital | $73,000 | |
S. Rey, Withdrawals | $5,600 | |
Computer Service Revenue | $25,659 | |
Wages Expense | $2,625 | |
Advertising Expense | $1,728 | |
Mileage Expense | $704 | |
Miscellaneous Expense | $250 | |
Repairs Expense – Computer | $805 | |
Total | $98,659 | $98,659 |
Conclusion:
The trial balance of Business Solutions for the month ended November 30 shows a total balance of $98,659.
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