AC 210 Lecture Notes - Lecture 7: Promissory Note, Matching Principle, Deferral

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silvercicada472

5 Jun 2018

School

University of Alabama

Department

Accountancy

Course

AC 210

Professor

Lisa Mc Kinney

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The Recording Process Illustrated

To understand how to record a variety of transactions, consider the description and

analysis of the Greener Landscape Group's first thirteen transactions. Then see how

each transaction appears in the company's general journal and general ledger

accounts.

Transaction 1:On April 1, 20X2, the owner of the Greener Landscape Group, J. Green,

invests $15,000 to open the business. Therefore, an asset account (cash) increases

and is debited for $15,000, and the owner's capital account (J. Green, capital) increases

and is credited for $15,000.

Notice that the cash account has a debit balance and the J. Green, capital account has

a credit balance. Since both balances are normal, brackets are not used.

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Transaction 2: On April 2, Mr. Green purchases a $15,000 used truck by paying $5,000

in cash and signing a $10,000 note payable, which is due in eighteen months. One

asset account (vehicles) increases and is debited for $15,000. Another asset account

(cash) decreases and is credited for $5,000. A liability account (notes payable)

increases and is credited for $10,000.

The shaded areas below provide a reference for the transaction's position in the journal

and ledger accounts. They are not part of the current entry.

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Transaction 3: On April 3, Mr. Green purchases lawn mowers for $3,000 in cash. One

asset account (equipment) increases and is debited for $3,000, and another asset

account (cash) decreases and is credited for $3,000.

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Document Summary

To understand how to record a variety of transactions, consider the description and analysis of the greener landscape group"s first thirteen transactions. Then see how each transaction appears in the company"s general journal and general ledger accounts. Transaction 1:on april 1, 20x2, the owner of the greener landscape group, j. Therefore, an asset account (cash) increases and is debited for ,000, and the owner"s capital account (j. Green, capital) increases and is credited for ,000. Notice that the cash account has a debit balance and the j. Since both balances are normal, brackets are not used. Transaction 2: on april 2, mr. green purchases a ,000 used truck by paying ,000 in cash and signing a ,000 note payable, which is due in eighteen months. One asset account (vehicles) increases and is debited for ,000. Another asset account (cash) decreases and is credited for ,000. A liability account (notes payable) increases and is credited for ,000.

Related Questions

Hello,

i am in accounting and having trouble with my general ledger. i need help with the set up and exactly how to do the balances. its not clicking with me at all. below i have included the information on the problem im working on, and would be great if i could some help.

Journal Entries and Trial Balance

On June 1, 2016, Kim Wheeler established an interior decorating business, Intrex Designs. During the month, Kim completed the following transactions related to the business.

June	1	Kim transferred cash from a personal bank account to an account to be used for the business, $18,400.
	4	Paid rent for period of June 4 to end of month, $1,780.
	6	Purchased a truck for $15,000, paying $1,000 cash and giving a note payable for the remainder.
	8	Purchased equipment on account, $7,180.
	10	Purchased supplies for cash, $1,230.
	12	Paid annual premiums on property and casualty insurance, $2,760.
	15	Received cash for job completed, $7,730.
	23	Paid creditor a portion of the amount owed for equipment purchased on June 13, $2,560.
	24	Recorded jobs completed on account and sent invoices to customers, $8,800.
	25	Received an invoice for truck expenses, to be paid in July, $810.
	26	Paid utilities expense, $920.
	27	Paid miscellaneous expenses, $330.
	28	Received cash from customers on account, $3,680.
	29	Paid wages of employees, $2,450.
	30	Withdrew cash for personal use, $2,040.

Required:

1. Journalize each transaction in a two-column journal, beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Journal entry explanations may be omitted. For a compound transaction, if an amount box does not require an entry, leave it blank.

11 Cash	31 Kim Wheeler, Capital
12 Accounts Receivable	32 Kim Wheeler, Drawing
13 Supplies	41 Fees Earned
14 Prepaid Insurance	51 Wages Expense
16 Equipment	53 Rent Expense
18 Truck	54 Utilities Expense
21 Notes Payable	55 Truck Expense
22 Accounts Payable	59 Miscellaneous Expense

General Journal				Page 1
Date	Description	Post. Ref.	Debit	Credit
2016
June 1	Cash
	Kim Wheeler, Capital
June 4	Rent Expense
	Cash
June 6	Truck
	Cash
	Notes Payable
June 8	Equipment
	Accounts Payable
June 10	Supplies
	Cash
June 12	Prepaid Insurance
	Cash
June 15	Cash
	Fees Earned

General Journal				Page 2
Date	Description	Post. Ref.	Debit	Credit
2016
June 23	Equipment
	Accounts Payable
June 24	Accounts Receivable
	Fees Earned
June 25	Truck Expense
	Accounts Payable
June 26	Utilities Expense
	Cash
June 27	Miscellaneous Expense
	Cash
June 28	Cash
	Accounts Receivable
June 29	Wages Expense
	Cash
June 30	Kim Wheeler, Drawing
	Cash

2. Post (in chronological order) the journal to a ledger of four-column accounts, inserting appropriate posting references in the general journal as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted. If an amount box does not require an entry, leave it blank.

General Ledger
Account	Cash				ACCOUNT NO.	11
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 1
June 4
June 6
June 10
June 12
June 15
June 23
June 26
June 27
June 28
June 29
June 30

Account	Accounts Receivable				ACCOUNT NO.	12
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 24
June 28

Account	Supplies				ACCOUNT NO.	13
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 10

Account	Prepaid Insurance				ACCOUNT NO.	14
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 12

Account	Equipment				ACCOUNT NO.	16
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 8

Account	Truck				ACCOUNT NO.	18
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 6

Account	Notes Payable				ACCOUNT NO.	21
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 6

Account	Accounts Payable				ACCOUNT NO.	22
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 8
June 23
June 25

Account	Kim Wheeler, Capital				ACCOUNT NO.	31
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 1

Account	Kim Wheeler, Drawing				ACCOUNT NO.	32
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 30

Account	Fees Earned				ACCOUNT NO.	41
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 15
June 24

Account	Wages Expense				ACCOUNT NO.	51
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 29

Account	Rent Expense				ACCOUNT NO.	53
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 4

Account	Utilities Expense				ACCOUNT NO.	54
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 26

Account	Truck Expense				ACCOUNT NO.	55
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 25

Account	Miscellaneous Expense				ACCOUNT NO.	59
					Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2016
June 27

3. Prepare an unadjusted trial balance for Intrex Designs as of June 30, 2016. For those boxes in which no entry is required, leave the box blank. The first two account titles are filled in as an example.

Intrex Designs Unadjusted Trial Balance June 30, 2016
	Debit Balances	Credit Balances
Cash
Accounts Receivable














Totals

4. Determine the excess of revenues over expenses for June.
$

greydonkey905

Meyer Corporation sells computers and provides computer repairservices. The balances in the General Ledger accounts as of 4/1/15are as follow:

Cash	$ 30,000	Notes Payable	$ 15,500
Accounts Receivable	17,000	Contributed Capital	63,000
Inventory	8,000	Retained Earnings	45,700
Prepaid Advertising	2,500	Sales Revenue
Building	39,000	Repair Service Revenue
Land	28,000	Cost of Goods Sold (COGS)
Equipment	20,000	Advertising Expense
Accounts Payable	13,000	Salary Expense
Unearned Revenue	$7,300

The business transactions for April are shownbelow:

APRIL

2 Meyer invested$80,000 cash into the business and contributed $100,000 worth ofequipment in exchange for stock.

4 Land and buildingwere purchased for $185,000. Of this amount, $90,000 applied to theland, and $95,000 to the building. The corporation paid $50,000 incash and financed the remaining balance with debt by signing a notepromising to pay in four years.

7 Purchased $10,000of computer inventory for the business on account.

10 Sold computers to customers for $20,000 receiving the entire amountin cash. The computers cost $15,000 (Hint: There are four accountsin this journal entry)

14 Received $7,000from a customer on previously billed repair services

18 Meyers Corporationbilled customers $15,000 for repair services rendered. Of thisamount, $8,500 was received in cash, and the balance was billed onaccount.

21 Paid $8,000 ofaccounts payable that had become due.

24 Paid $7,000 forseveral television advertisements aired in April

27 Received a check froma customer for $6,000 for repair services to be rendered in May

30 Paid employees $15,500 insalaries to employees for work done during the month.

Submit all your answers to D2L in one Exceldocument.

Prepare journal entries for each transaction (list the date,accounts and amounts debited and credited in good form).

	Accounts	Debit	Credit
April 1	Cash (+A)	$500,000
	Contributed Capital (+SE)		$500,000
To record purchase of additional shares of stock

Create T- account for each account used with the beginningbalance provided. Post each transaction from Question 1 to theappropriate T account and determine the ending balance as of April30.

Prepare a trial balance dated April 30, 2015 (see page 64 intextbook). Use the âSumâ function in Excel to addup your debit and credit columns.

Prepare an income statement for the period ended April 30, 2015.Does April appear to be a profitable month for Meyer Corporation?What is one suggestion you would make to increase the profitabilityof the business?

Prepare a balance sheet as of April 30, 2015. Use theâSumâ function in Excel for your totals.(Remember: Ending Retained Earnings = BeginningRetained Earnings + Net Income â Dividends)

salmonhound524

What are the answers to mini-practice set in McGraw Hill college accounting 15th editon?

Mini-Practice Set 1 Service Business Accounting Cycle Eliâs Consulting Services This project will give you an opportunity to apply your knowledge of accounting principles and procedures by handling all the accounting work of Eliâs Consulting Services for the month of January 2020. INTRODUCTION Assume that you are the chief accountant for Eliâs Consulting Services. During January, the business will use the same types of records and procedures that you learned about in Chapters 1 through 6. The chart of accounts for Eliâs Consulting Services has been expanded to include a few new accounts. Follow the instructions to complete the accounting records for the month of January. Eliâs Consulting Services Chart of Accounts Assets 101 Cash 111 Accounts Receivable 121 Supplies 134 Prepaid Insurance 137 Prepaid Rent 141 Equipment 142 Accumulated DepreciationâEquipment Liabilities 202 Accounts Payable Ownerâs Equity 301 Trayton Eli, Capital 302 Trayton Eli, Drawing 309 Income Summary Revenue 401 Fees Income Expenses 511 Salaries Expense 514 Utilities Expense 517 Supplies Expense 520 Rent Expense 523 Depreciation ExpenseâEquipment 526 Advertising Expense 529 Maintenance Expense 532 Telephone Expense 535 Insurance Expense INSTRUCTIONS Open the general ledger accounts and enter the balances for January 1, 2020. Obtain the necessary figures from the postclosing trial balance prepared on December 31, 2019, which appears in Figure 6.3. Analyze each transaction and record it in the general journal. Use page 3 to begin Januaryâs transactions. Post the transactions to the general ledger accounts. Prepare the Trial Balance section of the worksheet. Prepare the Adjustments section of the worksheet. Compute and record the adjustment for supplies used during the month. An inventory taken on January 31 showed supplies of $5,200 on hand. Compute and record the adjustment for expired insurance for the month. Record the adjustment for one month of expired rent of $4,000. Record the adjustment for depreciation of $183 on the old equipment for the month. The first adjustment for depreciation for the new equipment will be recorded in February. Complete the worksheet. Prepare an income statement for the month. Prepare a statement of ownerâs equity. Prepare a balance sheet using the report form.page 193 Journalize and post the adjusting entries. Journalize and post the closing entries. Prepare a postclosing trial balance. Analyze: Compare the January 31 balance sheet you prepared with the December 31 balance sheet shown in Figure 6.4. What changes occurred in total assets, liabilities, and the ownerâs ending capital? What changes occurred in the Cash and Accounts Receivable accounts? Has there been an improvement in the firmâs financial position? Why or why not? DATE TRANSACTIONS Jan. 2 Purchased supplies for $7,000; issued Check 1015. 2 Purchased a one-year insurance policy for $8,400; issued Check 1016. 7 Sold services for $20,000 in cash and $5,000 on credit during the first week of January. 12 Collected a total of $4,000 on account from credit customers during the first week of January. 12 Issued Check 1017 for $3,600 to pay for special promotional advertising to new businesses on the local radio station during the month. 13 Collected a total of $4,500 on account from credit customers during the second week of January. 14 Returned supplies that were damaged for a cash refund of $750. 15 Sold services for $20,700 in cash and $2,300 on credit during the second week of January. 20 Purchased supplies for $5,000 from Whiteâs, Inc.; received Invoice 2384 payable in 30 days. 20 Sold services for $12,500 in cash and $3,500 on credit during the third week of January. 20 Collected a total of $5,600 on account from credit customers during the third week of January. 21 Issued Check 1018 for $7,065 to pay for maintenance work on the office equipment. 22 Issued Check 1019 for $3,600 to pay for special promotional advertising to new businesses in the local newspaper. 23 Received the monthly telephone bill for $1,025 and paid it with Check 1020. 26 Collected a total of $1,600 on account from credit customers during the fourth week of January. 27 Issued Check 1021 for $3,000 to Office Plus as payment on account for Invoice 2223. 28 Sent Check 1022 for $2,675 in payment of the monthly bill for utilities. 29 Sold services for $19,000 in cash and $2,750 on credit during the fourth week of January. 31 Issued Checks 1023â1027 for $32,800 to pay the monthly salaries of the regular employees and three part-time workers. 31 Issued Check 1028 for $12,000 for personal use. 31 Issued Check 1029 for $4,150 to pay for maintenance services for the month. 31 Purchased additional equipment for $15,000 from Contemporary Equipment Company; issued Check 1030 for $10,000 and bought the rest on credit. The equipment has a five-year life and no salvage value. 31 Sold services for $7,600 in cash and $1,620 on credit on January 31.

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AC 210 Lecture Notes - Lecture 7: Promissory Note, Matching Principle, Deferral

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