Homework SourseStep 1 Complete the following in the July Journal Entries ta
Step 1:
Complete the following in the “July Journal Entries” tab in your workbook (be sure to look for the July Journal Entries tab at the bottom of the Peyton Approved Student Workbook).
The following events occur in July 2014:
July 1 – You take $15,000 from your personal savings account and buy common stock in Peyton
Approved.
July 1-Purchase $8500 in baking supplies from vendor, on account
July 3 – Your parents lend the company $10,000 cash, in exchange for a two-year, 6% note payable. Interest and the principal are repayable at maturity.
July 7 – Pay $3000 toward lease agreement for bakery space. The agreement is for 1 year. The rent is $1,500 per month, last month’s rent was required at time of lease agreement. Lease period is effective July 1st 2014 through June 30th, 2015.
July 10 – Pay $375 to the county for a business license.
July 11 – Purchase a cash register for $250 (deemed to be not material enough to qualify as depreciable equipment—use misc. exp.).
July 13 – You have baking equipment, including an oven and mixer, which you have been using for your home-based business and will now start using in the bakery. You estimate that the equipment is currently worth $5,000, and you transfer the equipment into the business in exchange for additional common stock. The equipment has a 5-year useful life.
July 13 – Pay $200 for business cards/flyers/posters/ads to use for advertising.
July 14 – Pay $300 for miscellaneous (use misc. supplies).
July 15 – Hire part-time helper to be paid $12 per hour. Pay periods are the 1st through the 15th and 16th through the end of the month with paydays being the 20th for the first pay period and the 5th of the following month for the second pay period. (No entry required on this date; for informational purposes only)
July 30- Received telephone bill for July in amount of $45. Payment is due on August 10th
July 31 – Pay $1,200 for a 12-month insurance policy. Policy effective dates August 1, 2014 through July 31st, 2015
July 31- Accrue wages earned for employee for period of 16th through 31st of July
(Wage calculations table is provided for you, below)
Total July bakery sales were $15,000. $5000 of these sales on accounts receivable
Wage calculation data:
Month
Hours
Rate
Pay
31-Jul
10
12
120
15-Aug
40
12
480
31-Aug
35
12
420
15-Sep
38
12
456
30-Sep
40
12
480
| Peyton Approved | |||
| General Journal Entries | |||
| Jul-14 | |||
| Date | Accounts | Debit | Credit |
| 1-Jul | Cash | 15,000.00 | |
| Common Stock | 15,000.00 | ||
| Contributed cash for common stock |
Solution
Date Account Debit credit July 1 Supplies 8500 Accounts payable 8500 [Supplies purchased on account] July 3 Cash 10000 Note payable 10000 [Cash received against note] July 7 Prepaid rent 3000 Cash 3000 [Being rent paid for 2 months In advance] July10 License Expense 375 cash 375 July11 Miscellaneous expense 250 cash 250 July13 Equipment 5000 common stock 5000 [being equipment transfered to business for common stock] July13 Advertising expense 200 cash 200 July1 4 Miscellaneous expense 300 cash 300 July15 No entry July 30 Telephone expense 45 Expense payable 45 [Bill accrued but not paid] July30 Prepaid Insurance 1200 cash 1200 [Insurance paid in advance] July31 Wage expense 120 wage payable 120 [Wages accrued but not paid] JUly31 Accounts receivable 5000 cash 10000. sales revenue 15000 [sales made]
