Financial Accounting MGT101 Assignment No.1 Fall 2014, Solution and Discussion

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First Example
The company started business on June 6, 2013. The business was started with $300,000. The transactions they engaged in during their first month of business are below:
Date Transaction
June8
An amount of $50,000 was paid for six months of rent.
June9
Equipment costing $100,000 was purchased using $40,000 cash. The remaining amount of $60,000 is a one year note with an interest rate of 3.4%
June10
Office supplies were purchased totaling $25,000 on account.
June16
Received $39,400 in cash for services rendered to customers.
June16
Paid the account for office supplies purchased June 10.
June20
$63,900 worth of services were given to customers. Received cash amount of $43,700. Customers promised to pay remaining amount of $20,200.
June21
Paid employees’ wages for June 8-June 21. Wages totaled $23,500.
June21
Received $20,200 in cash for services rendered to customers on June 20.
June22
Received $6,300 in cash as advanced payment from customers.
June27
Office supplies were purchased totaling $3,500 on account.
June28
Electricity bill received totaling $1,850.
June28
Phone bill received totaling $2,650.
June28
Miscellaneous expenses totaled $4,320.
These events would then be recorded into the accounting journal. The table below records the journal entries for the events above.


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