Journalizing, Posting, and Financial Statements Tutorial

School: University of Phoenix - Course: ACCOUNTING /290 - Subject: Accounting

Journalizing, Posting, and Creating Financial Statements © 2021 Pedago, LLC. All rights reserved.6/23/211Step 1: Journalize the following transactions using the chart of accounts provided: AssetsRevenue CashService Revenue Accounts Receivable Prepaid InsuranceExpenses SuppliesRent Expense EquipmentInsurance Expense Accumulated DepreciationDepreciation Expense Salary Expense LiabilitiesUtility Expense Accounts PayableSupplies Expense Salary PayableInterest Expense Deferred Revenue Notes Payable Dividends Equity Paid in Capital Retained Earnings 1.On January 1, Adam Wurst invests $10,000 cash to fund his startup, Wurst Company. January 1 2.On January 1, $5,000 of Office equipment is purchased with the signing of a 3-month, 12% annual interest rate, $5,000 notes payable. January 1 3.On January 25, Wurst Company receives a $1,200 cash advance from Abby Normal, a customer, for services that are expected to be delivered June 1. January 25 4.On February 1, Wurst incurs office rent for February and pays in cash for $900. February 1

Journalizing, Posting, and Creating Financial Statements © 2021 Pedago, LLC. All rights reserved.6/23/2125.On March 1, Wurst pays $600 for a 12 month insurance policy that will provide coverage through to February 28 of next year. March 1 6.On March 1, Wurst incurs office rent for March and pays in cash for $900. March 1 7.On March 10, Wurst purchases supplies on account for $2,500. Vendor terms are payment within 60 days (Net 60), Wurst will defer payment until then. In addition, instead of expensing immediately, Wurst decides to setup an asset for the supplies and record an expense at the end of the quarter for items that have been used. March 10 8.On March 15, Wurst hires four employees to begin work on April 19. Each employee is to receive a weekly salary of $500 which will be payable every 2 weeks. March 15 9.On March 30, Wurst Company declares and pays cash dividends of $500 to its sole shareholder, Adam Wurst. March 30 10.On March 31, Wurst Company's note payable comes due. Record both the principal payment and interest paid to the lender. (See transaction 2 above for more information.)