Question

Barnes Computers Ltd. (Barnes) has an October 31 fiscal year end and prepared adjusting journal entries monthly.

Required:

Record the appropriate journal entries for the transactions in November.  If no entry is required, clearly state “no entry required”.

Nov. 2     Barnes collects $500 from a new client for computer repair to be completed in December.

Nov. 5     Contacted a client’s lawyer today regarding a complaint about computer repairs provided.  The client is planning to sue Barnes for $5,000.

Nov. 8     The company purchased a van (fair value of $22,000) and computer diagnostic equipment (fair value of $10,000).  The purchase was completed by Barnes paying $8,000 in cash and getting a loan payable for the remaining amount.

Nov. 10   Collected $1,600 from a client for work that was completed on account at the end of September.

Nov. 18   In October Barnes purchased $1,400 worth of computer repair supplies from a supplier on account.  The transaction was recorded correctly in October.  Barnes paid half of the amount owing today.

Nov 30    Paid the monthly interest owing on a $12,000, 6% loan payable.  (No principal is due at this time.)

Nov. 30   Paid wages to a part-time employee for hours worked in November.  The employee worked 16 days at $65/day.

Answer 1

Date	Accounts Titles and Explanation	Debit	Credit
Nov 2	Cash	$500
	Unearned Service Revenue		$500
Nov 5	No entry required
Nov 8	Vehicle	$22,000
	Computer Equipment	$10,000
	Cash		$8,000
	Loan Payable		$24,000
Nov 10	Cash	$1,600
	Accounts Receivable		$1,600
Nov 18	Accounts Payable	$700
	Cash		$700
Nov 30	Interest Expense ($12,000 x 6% x 1/12)	$60
	Cash		$60
Nov 30	Wages Expense (16 x $65)	$1,040
	Cash		$1,040