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Concept explainers
Journalizing transactions, posting
Learning Objectives 3, 4
3. Service Revenue Balance $6,800
Theodore McMahon opened a law office on April 1, 2018. During the ?rst month of operations, the business completed the following transactions:
Apr. 1 | McMahon contributed $70,000 cash to the business, Theodore McMahon, Attorney. The business issued gave capital to McMahon. |
3 | Purchased office supplies, $1,100, and furniture, $1,300, on account. |
4 | Performed legal services for a client and received $2,000 cash. |
7 | Purchased a building with a market value of $150,000, and land with a market value of $30,000. The business paid $40,000 cash and signed a note payable to the bank for the remaining amount. |
11 | Prepared legal documents for a client on account, $400. |
15 | Paid assistant‘s semimonthly salary, $1,200. |
16 | Paid for the office supplies purchased on April 3 on account. |
18 | Received $2,700 cash for helping a client sell real estate. |
19 | Defended a client in court and billed the client for $1,700. |
25 | Received a bill for utilities, $650. The bill will be paid next month. |
28 | Received cash on account, $1,100. |
29 | Paid $3,600 cash for a 12-month insurance policy starting on May 1. |
29 | Paid assistant's semimonthly salary, $1,200. |
30 | Paid monthly rent expense, $2,100. |
30 | McMahon withdrew cash of $3,200. |
Requirements
1. Record each transaction in the journal, using the following account titles: Cash;
2. Open the following four~co|umn accounts including account numbers: Cash, 101; Accounts Receivable, 111; Of?ce Supplies; 121; Prepaid Insurance, 131; Land, 141; Building, 151; Furniture, 161; Accounts Payable, 201; Utilities Payable, 211; Notes Payable, 221; McMahon, Capital, 301; McMahon, Withdrawals, 311; Service Revenue, 411; Salaries Expense, 511; Rent Expense, 521; and Utilities
Expense, 531.
3. Post the journal entries to four−column accounts in the ledger, using dates, account numbers; joumal references, and posting references. Assume the joumal entries were recorded on page 1 of the journal.
4. Prepare the trial balance of Theodore McMahon, Attorney, at April 30, 2018.
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Chapter 2 Solutions
Horngren's Accounting, The Financial Chapters (12th Edition)
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