Q 36PGB-2 - Horngren'S Financial And Managerial Accounting

Question

Journalizing transactions, posting journal entries to T-accounts, and preparing a trial balance 

Beth Stewart started her practice as a design consultant on November 1, 2018. During the first month of operations, the business completed the following transactions: 

Nov. 1 Received \(41,000 cash and issued common stock to Stewart. 

4 Purchased office supplies, \)1,200, and furniture, \(2,300, on account. 

6 Performed services for a law firm and received \)2,100 cash. 

7 Paid \(27,000 cash to acquire land to be used in operations. 

10 Performed services for a hotel and received its promise to pay the \)800 within one week. 

14 Paid for the furniture purchased on November 4 on account. 

15 Paid assistant’s semimonthly salary, \(1,470. 

17 Received cash on account, \)500. 

20 Prepared a design for a school on account, \(680. 

25 Received \)1,900 cash for design services to be performed in December. 

28 Received \(3,100 cash for consulting with Plummer & Gordon. 

29 Paid \)840 cash for a 12-month insurance policy starting on December 1. 

30 Paid assistant’s semimonthly salary, \(1,470. 30 Paid monthly rent expense, \)650. 

30 Received a bill for utilities, \(650. The bill will be paid next month. 

30 Paid cash dividends of \)2,800.

Requirements 2. Open a T-account for each of the accounts.

Step-by-Step Solution

Answer

Rent expense is the cost of using the property owned by another party and required t-account in step 2.

Step-by-Step Solution Step 1: Definition of Rent Expense

The rent expense is defined as the cost of using the property owned by some other party or the business.

Step 2: Opening T-Account

Cash

 

Accounts Receivables

 

Office Supplies

 

Prepaid Insurance

 

Land

 

 

Furniture

 

 

Accounts Payable

 

Utilities Payable

 

Unearned Revenue

 

Common Stock

 

Dividends

 

Service Revenue

 

Salaries Expense

 

Rent Expense

 

Utilities Expense