P211B Hobson Nolan is a human resources professional wh HN H

P2-11B Hobson Nolan is a human resources professional wh HN HR Consulting. The company had the following balances in its general ledger at February 28, 2017 $3,500, Accounts Receivable $14,450, Equipment $15,100, Accounts Payable $18,750, and H. Nolan, C $14,300. The following events and transactions occurred during March 2017 o operates a consulting practice under the n ame Cash Borrowed $12,000 cash from the bank, signing a note payable. Paid $13,000 to creditors on account. Paid the monthly insurance premium of $145. Paid the monthly charge of $550 for keeping the company\'s website up to date. The company uses the website to advertise its services. Collected accounts receivable of $8,000. Paid an additional $5,000 to creditors on account. Miscellaneous expenses were paid in cash, $580. Consulting services provided in March were for $2,000 cash and $5,000 on account. Paid salaries, $1,650. Paid the bank $555 on the note payable, of which $55 is interest and $500 is a partial payment of the note. Paid March and April\'s rent, which totalled $1,900 ($950 per month). Withdrew $1,000 cash for personal use. Mar. 1 2 3 10 16 18 30 31 31 31 31 31 Instructions (a) Prepare journal entries to record each of the My..densactions. (b) Open the required ledger accounts for the treastuis that were journalized, and enter the February 28,2017, balances. Use T accounts. (c) Post the journal entries to the accounts in the ledger. (d) Prepare a trial balance as at the end of March. TAKING IT FURTHER Is the March 31 rent payment an asset or an expense? Explain.

Solution

a) Journal entries :

b & c) T-Accounts and postings :

d) Trial balance as at the end of March :

Date	Accounts Titles	Debit $	Credit $
Mar 1	Cash	12000
	Note payable		12000
2	AP	13000
	Cash		13000
3	Insurance exp.	145
	Cash		145
10	Telephone (Internet) exp.	550
	Cash		550
16	Cash	8000
	AR		8000
18	AP	5000
	Cash		5000
30	Miscel. expense	580
	Cash		580
31	Cash	2000
	AR	5000
	Consultancy service revenue		7000
31	Salary expense	1650
	Cash		1650
31	NP	500
	Interest exp.	55
	Cash		555
31	Rent Exp	950
	Prepaid Rent	950
	Cash		1900
31	Drawings	1000
	Cash		1000