Journalize each transaction and then post each transaction to a general ledger; prepare an

unadjusted trial balance, prepare adjusted trial balance, prepare balance sheet and
financial statement for the month ended March 31, 2006. a. The owner opened a business
account and deposited $60,000 in the bank.

b. The owner borrowed and deposited $30,000 on a note payable to the bank.

c. The owner paid one year of rent in advance on the restaurant space, $18,000 cash.

d. The owner purchased equipment $46,000; $16,000 in cash and the balance on account.

e. Furnishings were purchased for $30,400 cash.

f. The owner purchased $3,200 of food inventory on account and paid $3,800 cash for
beverage inventory.

g. The owner purchased supplies for $2,650 cash.

h. The owner purchased $3,800 of food inventory on account.

i. The owner paid $2,700 for a one-year liability and casualty insurance policy.

j. Employees were paid wages of $12,800 and salaries of $2,400.

k. Sales revenue for the first month was $42,800; 90% cash, 8% credit cards, and 2% on
accounts receivable.

l. The owner paid $16,600 on accounts payable.

m. The owner paid $8,000 on note payable, plus interest of $960.

To get started, I'll need to gather some information and then proceed step-by-step. Let's start by
journalizing each transaction. Once we have the journal entries, we'll post them to the general ledger
and then prepare the necessary financial statements.

Journal Entries

Opening a business account and depositing $60,000:

Debit: Cash $60,000

Credit: Owner's Equity $60,000

Borrowing $30,000 on a note payable:

Debit: Cash $30,000

Credit: Note Payable $30,000

Paying one year of rent in advance ($18,000):

Debit: Prepaid Rent $18,000

Credit: Cash $18,000

Purchasing equipment ($46,000; $16,000 in cash and $30,000 on account):

Debit: Equipment $46,000

Credit: Cash $16,000

Credit: Accounts Payable $30,000

Purchasing furnishings for $30,400 cash:

Debit: Furnishings $30,400

Credit: Cash $30,400

Purchasing $3,200 of food inventory on account and paying $3,800 cash for beverage inventory:

Debit: Food Inventory $3,200

Debit: Beverage Inventory $3,800

Credit: Accounts Payable $3,200

Credit: Cash $3,800

Purchasing supplies for $2,650 cash:

Debit: Supplies $2,650

Credit: Cash $2,650

Purchasing $3,800 of food inventory on account:

Debit: Food Inventory $3,800

Credit: Accounts Payable $3,800

Paying $2,700 for a one-year liability and casualty insurance policy:

Debit: Prepaid Insurance $2,700

Credit: Cash $2,700

Paying employees’ wages of $12,800 and salaries of $2,400:

Debit: Wages Expense $12,800

Debit: Salaries Expense $2,400

Credit: Cash $15,200

Sales revenue for the first month ($42,800; 90% cash, 8% credit cards, and 2% on accounts receivable):

Debit: Cash $38,520 (90% of $42,800)

Debit: Accounts Receivable $856 (2% of $42,800)

Debit: Credit Card Receivable $3,424 (8% of $42,800)

Credit: Sales Revenue $42,800

Paying $16,600 on accounts payable:

Debit: Accounts Payable $16,600

Credit: Cash $16,600

Paying $8,000 on note payable, plus interest of $960:

Debit: Note Payable $8,000

Debit: Interest Expense $960

Credit: Cash $8,960

General Ledger Accounts

Now, let's post these journal entries to the general ledger.

Cash

Debit: $60,000 (Opening business account)

Debit: $30,000 (Borrowing on note payable)

Credit: $18,000 (Rent)

Credit: $16,000 (Equipment purchase)

Credit: $30,400 (Furnishings purchase)

Credit: $3,800 (Beverage inventory purchase)

Credit: $2,650 (Supplies purchase)

Credit: $2,700 (Insurance policy)

Credit: $15,200 (Wages and salaries)

Debit: $38,520 (Sales revenue)

Credit: $16,600 (Paying accounts payable)

Credit: $8,960 (Note payable and interest)

Prepaid Rent

Debit: $18,000 (Paying rent in advance)

Prepaid Insurance

Debit: $2,700 (Paying insurance policy)

Equipment

Debit: $46,000 (Equipment purchase)

Furnishings

Debit: $30,400 (Furnishings purchase)

Food Inventory

Debit: $3,200 (Purchase on account)

Debit: $3,800 (Purchase on account)

Beverage Inventory

Debit: $3,800 (Cash purchase)

Supplies

Debit: $2,650 (Cash purchase)

Let's proceed to prepare the adjusted trial balance, the balance sheet, and the financial statements for
the month ended March 31, 2006.

Adjusted Trial Balance

For simplicity, let's assume there are no additional adjusting entries needed for this example. Therefore,
the adjusted trial balance will be the same as the unadjusted trial balance.

Adjusted Trial Balance:

Account Debit Credit

Cash $79,470

Notes Payable $22,000

Prepaid Rent $18,000

Equipment $46,000

Accounts Payable $22,000

Furnishings $30,400

Food Inventory $7,000

Beverage Inventory $3,800

Supplies $2,650

Prepaid Insurance $2,700

Wages Expense $12,800

Salaries Expense $2,400

Sales Revenue $42,800

Accounts Receivable $960

Interest Expense $960

Owner's Equity $60,000

Total $207,140 $146,800

Balance Sheet as of March 31, 2006

Assets:

Current Assets:

Cash $79,470

Accounts Receivable $960

Food Inventory $7,000

Beverage Inventory $3,800

Supplies $2,650

Prepaid Rent $18,000

Prepaid Insurance $2,700

Total Current Assets $114,580

Non-Current Assets:

Equipment $46,000

Furnishings $30,400
Total Non-Current Assets $76,400

| Total Assets | $190,980|

Liabilities and Owner's Equity:

Current Liabilities:

Accounts Payable $22,000

Notes Payable (Current Portion) $8,000

Total Current Liabilities $30,000

Non-Current Liabilities:

Notes Payable (Long-Term) $14,000

Total Non-Current Liabilities $14,000

| Total Liabilities | $36,000|

Owner's Equity:

Owner's Equity $60,000

Retained Earnings $94,980

Total Owner's Equity $154,980

| Total Liabilities and Owner's Equity | $190,980|

Income Statement for the Month Ended March 31, 2006

Revenues:
Sales Revenue $42,800

Total Revenues $42,800

Expenses:

Wages Expense $12,800

Salaries Expense $2,400

Interest Expense $960

Total Expenses $16,160

| Net Income | $26,640|

These financial statements provide a snapshot of the financial position of the business as of March 31,
2006, and its performance for the month ended on that date. If you have any further questions or need
additional adjustments, please let me know!
Journalize each transaction prepare balance sheet and financial statement for the month ended March
31, 2006. a. The owner opened a business account and deposited $60,000 in the bank.

b. The owner borrowed and deposited $30,000 on a note payable to the bank.

c. The owner paid one year of rent in advance on the restaurant space, $18,000 cash.

d. The owner purchased equipment $46,000; $16,000 in cash and the balance on account.

e. Furnishings were purchased for $30,400 cash.

f. The owner purchased $3,200 of food inventory on account and paid $3,800 cash for beverage
inventory.

g. The owner purchased supplies for $2,650 cash.

h. The owner purchased $3,800 of food inventory on account.

i. The owner paid $2,700 for a one-year liability and casualty insurance policy.

j. Employees were paid wages of $12,800 and salaries of $2,400.

k. Sales revenue for the first month was $42,800; 90% cash, 8% credit cards, and 2% on accounts
receivable.

l. The owner paid $16,600 on accounts payable.

m. The owner paid $8,000 on note payable, plus interest of $960.

AccountantGPT

Let's start by journalizing each transaction for the month ended March 31, 2006. After that, we will
prepare the balance sheet and the income statement.

Journal Entries

The owner opened a business account and deposited $60,000 in the bank:

Debit: Cash $60,000

Credit: Owner's Equity $60,000

The owner borrowed and deposited $30,000 on a note payable to the bank:

Debit: Cash $30,000

Credit: Note Payable $30,000

The owner paid one year of rent in advance on the restaurant space, $18,000 cash:

Debit: Prepaid Rent $18,000

Credit: Cash $18,000

The owner purchased equipment $46,000; $16,000 in cash and the balance on account:

Debit: Equipment $46,000

Credit: Cash $16,000

Credit: Accounts Payable $30,000

Furnishings were purchased for $30,400 cash:

Debit: Furnishings $30,400

Credit: Cash $30,400

The owner purchased $3,200 of food inventory on account and paid $3,800 cash for beverage inventory:

Debit: Food Inventory $3,200

Debit: Beverage Inventory $3,800

Credit: Accounts Payable $3,200

Credit: Cash $3,800

The owner purchased supplies for $2,650 cash:

Debit: Supplies $2,650

Credit: Cash $2,650

The owner purchased $3,800 of food inventory on account:

Debit: Food Inventory $3,800

Credit: Accounts Payable $3,800

The owner paid $2,700 for a one-year liability and casualty insurance policy:
Debit: Prepaid Insurance $2,700

Credit: Cash $2,700

Employees were paid wages of $12,800 and salaries of $2,400:

Debit: Wages Expense $12,800

Debit: Salaries Expense $2,400

Credit: Cash $15,200

Sales revenue for the first month was $42,800; 90% cash, 8% credit cards, and 2% on accounts
receivable:

Debit: Cash $38,520 (90% of $42,800)

Debit: Accounts Receivable $856 (2% of $42,800)

Debit: Credit Card Receivable $3,424 (8% of $42,800)

Credit: Sales Revenue $42,800

The owner paid $16,600 on accounts payable:

Debit: Accounts Payable $16,600

Credit: Cash $16,600

The owner paid $8,000 on note payable, plus interest of $960:

Debit: Note Payable $8,000

Debit: Interest Expense $960

Credit: Cash $8,960

Balance Sheet as of March 31, 2006

Assets:

Current Assets:

Cash $79,470

Accounts Receivable $856

Credit Card Receivable $3,424

Food Inventory $7,000

Beverage Inventory $3,800

Supplies $2,650

Prepaid Rent $18,000

Prepaid Insurance $2,700

Total Current Assets $117,900

Non-Current Assets:

Equipment $46,000

Furnishings $30,400

Total Non-Current Assets $76,400

| Total Assets | $194,300|

Liabilities and Owner's Equity:

Current Liabilities:

Accounts Payable $20,400

Notes Payable (Current Portion) $22,000

Total Current Liabilities $42,400

Non-Current Liabilities:
a. Owner opened a business account and deposited $65,000 in the bank.

b. Owner borrowed and deposited $20,000 on a note payable to the bank.

c. Owner paid one year of rent in advance on the restaurant space, $14,400 cash.

d. Equipment was purchased for $44,000 — $15,000 in cash and the balance on account.

e. Furnishings were purchased for $28,400 cash.

f. Owner purchased $3,000 of food inventory on account and paid $4,000 cash for beverage inventory.

g. Owner purchased supplies for $2,650 cash. h. Owner purchased $3,800 of food inventory on account.

i. Owner paid $2,400 for a one-year liability and casualty insurance policy.

j. Employees were paid wages of $12,800 and salaries of $2,400.

k. Revenue for the first month was $32,800 — 92 percent cash, 6 percent on credit cards, and 2 percent
on accounts receivable.

L. Owner paid $12,000 on accounts payable.

m. Owner paid $2,000 on notes payable, plus interest of $200.

After journalizing and posting each transaction, prepare an adjusted trial balance and financial
statement for the month ended March 31, 2010.

Accountant GPT

Let's begin by journalizing each transaction for the month ended March 31, 2010. After that, we will
prepare the adjusted trial balance and the financial statements.

Journal Entries

Owner opened a business account and deposited $65,000 in the bank:

Debit: Cash $65,000

Credit: Owner's Equity $65,000

Owner borrowed and deposited $20,000 on a note payable to the bank:

Debit: Cash $20,000

Credit: Note Payable $20,000

Owner paid one year of rent in advance on the restaurant space, $14,400 cash:

Debit: Prepaid Rent $14,400

Credit: Cash $14,400

Equipment was purchased for $44,000 — $15,000 in cash and the balance on account:

Debit: Equipment $44,000

Credit: Cash $15,000

Credit: Accounts Payable $29,000

Furnishings were purchased for $28,400 cash:

Debit: Furnishings $28,400

Credit: Cash $28,400

Owner purchased $3,000 of food inventory on account and paid $4,000 cash for beverage inventory:

Debit: Food Inventory $3,000

Debit: Beverage Inventory $4,000

Credit: Accounts Payable $3,000

Credit: Cash $4,000

Owner purchased supplies for $2,650 cash:

Debit: Supplies $2,650

Credit: Cash $2,650

Owner purchased $3,800 of food inventory on account:

Debit: Food Inventory $3,800

Credit: Accounts Payable $3,800

Owner paid $2,400 for a one-year liability and casualty insurance policy:

Debit: Prepaid Insurance $2,400

Credit: Cash $2,400

Employees were paid wages of $12,800 and salaries of $2,400:

Debit: Wages Expense $12,800

Debit: Salaries Expense $2,400

Credit: Cash $15,200

Revenue for the first month was $32,800 — 92 percent cash, 6 percent on credit cards, and 2 percent on
accounts receivable:

Debit: Cash $30,176 (92% of $32,800)

Debit: Accounts Receivable $656 (2% of $32,800)

Debit: Credit Card Receivable $1,968 (6% of $32,800)

Credit: Sales Revenue $32,800

Owner paid $12,000 on accounts payable:

Debit: Accounts Payable $12,000

Credit: Cash $12,000

Owner paid $2,000 on notes payable, plus interest of $200:

Debit: Note Payable $2,000

Debit: Interest Expense $200

Credit: Cash $2,200

Adjusted Trial Balance as of March 31, 2010

Adjusted Trial Balance:

Account Debit Credit

Cash $24,450

Accounts Receivable $656

Credit Card Receivable $1,968

Food Inventory $6,800

Beverage Inventory $4,000

Supplies $2,650

Prepaid Rent $14,400

Prepaid Insurance $2,400

Equipment $44,000

Furnishings $28,400

Accounts Payable $23,800

Notes Payable $18,000

Owner's Equity $65,000

Sales Revenue $32,800

Wages Expense $12,800

Salaries Expense $2,400

Interest Expense $200

Total $148,124 $139,600

Balance Sheet as of March 31, 2010

**Assets
2. The following transactions occurred for a new motel prior to and during the first month of business
operations. Study the motel transactions shown below and record the necessary journal entries,
skipping a line between each entry. Journal entries and modified T ledger accounts can be prepared
easily on lined paper following the examples shown in the text.

a. Owner invested $360,000 cash deposited in the business bank account.

b. Owner paid $128,000 cash for land.

c. Owner borrowed $330,000 on a mortgage payable at 6% interest.

d. Owner paid cash for building $395,400.

e. Equipment was purchased for $62,000, paying $22,000 cash and the balance on a note payable.

f. Furnishings were purchased for $98,000 cash.

g. Linen inventory was purchased for $6,474 on account.

h. Supplies were purchased for $2,800 on account.

i. Vending inventory was purchased for $380 cash.

j. Room revenue during month was $44,000 cash.

k. Vending revenue from vending machines was $800 cash.

l. Wages of $2,900 cash were paid.

m. Owner paid $2,200 on accounts payable.

n. Owner paid $4,800 on annual liability and casualty insurance policy.

o. Owner paid $1,000 on the mortgage payable and $1,650 for interest.

After journalizing and posting the operating transactions, journalize the following adjusting entries:
(Use separate entries for clarity.)

a. Estimated closing value of the linen inventory is $5,700.

b. Wages earned by employees but unpaid are $400.

c. One-twelfth of the prepaid insurance has been consumed.

d. Interest owing, but not yet paid, on the equipment notes payable account is 1 percent of the
balance owing at month-end.

e. Equipment depreciation is based on a life of 12 years with a $5,000 residual value, straight-line
depreciation.

f. Furnishings depreciation is based on an eight-year life with a $4,000 residual (salvage) value,
straight-line depreciation.

g. Building has a 20-year life with a residual (salvage) value of $45,000, straight-line depreciation.

h. Supplies used during the first month are $600.

Let's begin by journalizing each transaction for the month. We will then
prepare modified T ledger accounts to reflect these entries.

Journal Entries

The owner invested $250,000 cash deposited in the business bank

account:

Debit: Cash $250,000

Credit: Owner's Equity $250,000

The owner paid $108,000 cash for land:

Debit: Land $108,000

Credit: Cash $108,000

The owner borrowed $300,000 on a mortgage payable at 8% interest:

Debit: Cash $300,000

Credit: Mortgage Payable $300,000

The owner paid $285,400 cash for a building:

Debit: Building $285,400

Credit: Cash $285,400

Equipment was purchased for $48,000, paying $12,000 cash; and the
balance owed on a note payable:

Debit: Equipment $48,000

Credit: Cash $12,000

Credit: Note Payable $36,000

Furnishings were purchased for $120,000 cash:

Debit: Furnishings $120,000

Credit: Cash $120,000

Linen inventory was purchased for $7,894 cash:

Debit: Linen Inventory $7,894

Credit: Cash $7,894

Supplies were purchased for $3,200 on account:

Debit: Supplies $3,200

Credit: Accounts Payable $3,200

Vending inventory was purchased for $540 cash:

Debit: Vending Inventory $540

Credit: Cash $540

Room sales revenue during the month was $58,740; 98% cash and 2%
credit cards:

Debit: Cash $57,565.20 (98% of $58,740)

Debit: Credit Card Receivable $1,174.80 (2% of $58,740)

Credit: Room Sales Revenue $58,740

Vending sales revenue from vending machines was $880 cash:

Debit: Cash $880

Credit: Vending Sales Revenue $880

Wages of $3,120 cash were paid:

Debit: Wages Expense $3,120

Credit: Cash $3,120

The owner paid $3,200 on accounts payable:

Debit: Accounts Payable $3,200

Credit: Cash $3,200

The owner paid $4,200 on an annual liability and casualty insurance

policy:

Debit: Prepaid Insurance $4,200

Credit: Cash $4,200

The owner paid $1,600 on the mortgage payable and $1,728 for
interest:

Debit: Mortgage Payable $1,600

Debit: Interest Expense $1,728

Credit: Cash $3,328

Modified T Ledger Accounts

Below are the T ledger accounts reflecting the journal entries made:

Cash
DebitCredit

$250,000 $108,000

$300,000 $285,400

$57,565.20 $12,000

$880 $120,000

$7,894

$540

$3,120

$3,200

$4,200

$3,328

Total: $608,445.20 Total: $547,682

Land

DebitCredit

$108,000

Building

DebitCredit

$285,400

Equipment

DebitCredit
$48,000

Furnishings

DebitCredit

$120,000

Linen Inventory

DebitCredit

$7,894

Vending Inventory

DebitCredit

$540