ACCT 202 Chapter 1: ACC 202 ch 1
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Joe Jackson decides to go into the car repair business by opening Honest Joeâs Garage. The following events occurred during January 2017, the first month of operations:
a. | Joe contributed $15,000 from his savings to the business and took 3,000 shares of no par value common stock. |
b. | The business paid $3,000 for a six-month insurance policy. Record as Prepaid Insurance. |
c. | Paid $750 cash for the first monthâs rent. |
d. | Purchased shop equipment for $8,000 cash. |
e. | Purchased shop supplies costing $3,000 on account. |
f. | Purchased a used wrecker for $11,500 by paying $1,500 down and financing the balance on a three-year note. |
g. | Received $1,750 from customers for repair work done. |
h. | Joe invested another $5,000 into the business and took another 1,000 shares of stock. |
i. | Paid $300 cash for radio advertising for the first month. |
j. | Paid $200 cash for gas, oil, and service costs on the wrecker. |
k. | Paid $3,000 on accounts payable. |
l. | Repaired a truck for Ace Trucking for $1,200 on account. |
m. | Paid $70 for the installation of the telephone. |
n. | Paid $180 for repairs on the wrecker. |
o. | Collected $1,000 cash and accepted a 60-day notes receivable of $1,450 from Speedy Trucking for repair services rendered. |
p. | Paid $150 for cleaning and minor maintenance on the building. |
q. | Received $1,500 cash from customers for repair services rendered. |
r. | Purchased shop supplies for $2,500 cash. |
s. | Purchased a computer for the office for $1,250 cash. |
t. | Received payment of $1,200 from Ace Trucking. |
u. | Paid the monthly utility bill, $900. |
v. | Paid $350 for gas and oil for the wrecker. |
Required:
Record the adjusting journal entry for insurance.
Make an adjusted trial balance.