Question

The following transactions occurred during the year 1999:

March 1, lawyer Abdalaziz begins his own business as a real estate with a cash investment of 100,000$.

On March 2, $20000 was paid as a rent for the office.

On March 3, he purchased office equipment for10000$ paid 2000 cash and 8000 on credit .

On March 3, he purchased supplies for 500$ cash.

On march 10, $1500 was paid for advertising expenses

On March 20, he paid workers salaries s of $ 3,000 cash.

On March 1, Abdalaziz borrowed 10,000$ by signing 5%, one-year note on April1, 2000.

April 23, Purchased a one-year fire insurance policy for 30,000$.

On May 1, he withdrew $ 1000 in cash for personal use.

On Jun 7, he performed a legal services for clients for $5000 cash

On Jun 20, he performed a legal service for client for $10000 of service he received cash of 6000 and it bill the balance 4000 on account.

On July 31, used office supply during the month $150

On august 17,$500 paid cash as apaymant of equipment cridet

On October 1,hr received 1800 in cash from client who had been billed .

Utilities expense incurred but not paid on March 31, 1999.250$ .

Adjustment data

The equipment purchased on March 3, 1999, is being depreciated using the straight-line method over 10 years, with a salvage value of $1,800.

Abdalaziz Law office estimates that uncollectible accounts receivable at year-end is $2200.

The short-term note is dated march 1, 1999, and carry a 5% interest rate.

Prepare journal entries for each transactions and the adjusting entries and post to the ledger

Answer 1

Date	Account Title	Debit	Credit
1-Mar	Cash	100000
	Abdalaziz Capital		100000
	Cash	10000
	5% One Year Note		10000
2-Mar	Rent expense	20000
	Cash		20000
3-Mar	Office equipment	10000
	Cash		2000
	Accounts payable		8000
	Supplies	500
	Cash		500
10-Mar	Advertising expense	1500
	Cash		1500
20-Mar	Salaries expense	3000
	cash		3000
23-Apr	Insurance expense	30000
	Cash		30000
1-May	Drawings	1000
	Cash		1000
7-Jun	Cash	5000
	Legal Service fees		5000
20-Jun	Cash	6000
	Accounts Receivable	4000
	Legal Service fees		10000
31-Jul	Supplies expense	150
	Supplies		150
17-Aug	Accounts payable	500
	Cash		500
Oct.1	Cash	1800
	Accounts Receivable		1800
	Utilities expense	250
	Accounts payable		250
	Adjustment entries
	Depreciation expense	683
	Accumulated depn.Equipment		683
	(10000-1800)/10yrs.*10 mths/12 mths.
	Uncollectible expense	2200
	Accounts Receivable		2200
	Interest expense	417
	Interest payable		417
	(10000*5%*10/12)
	Prepaid Insurance	20000
	Insurance expense		20000
	(30000/12*8 mths)
		217000	217000
	NOTE: Dec. fiscal year end assumed
	LEDGER ACCOUNTS			Net Ledger balances
Date	Account Title	Debit	Credit	Debit	Credit
	5% One Year Note		10000		10000
	Abdalaziz Capital		100000		100000
	Accounts payable		8000
17-Aug	Accounts payable	500
	Accounts payable		250		7750
	Accounts Receivable	4000
	Accounts Receivable		1800
	Accounts Receivable		2200		0
	Accumulated depn.Equipment		683		683
10-Mar	Advertising expense	1500		1500
	Uncollectible Expense	2200		2200
1-Mar	Cash	100000
	Cash	10000
	Cash		20000
	Cash		2000
	Cash		500
	Cash		1500
	cash		3000
	Cash		30000
	Cash		1000
7-Jun	Cash	5000
20-Jun	Cash	6000
	Cash		500
Oct.1	Cash	1800		64300
	Depreciation expense	683		683
1-May	Drawings	1000		1000
23-Apr	Insurance expense	30000
	Insurance expense		20000	10000
	Interest expense	417		417
	Interest payable		417		417
	Legal Service fees		5000
	Legal Service fees		10000		15000
3-Mar	Office equipment	10000		10000
	Prepaid insurance	20000		20000
2-Mar	Rent expense	20000		20000
20-Mar	Salaries expense	3000		3000
	Supplies		150
	Supplies	500		350
31-Jul	Supplies expense	150		150
	Utilities expense	250		250
		217000	217000	133850	133850
	TRIAL BALANCE
	Cash	64300
	Accounts Receivable	0
	Supplies	350
	Prepaid Insurance	20000
	Office equipment	10000
	Accumulated depn.Equipment		683
	Accounts payable		7750
	Interest payable		417
	5% One Year Note		10000
	Abdalaziz Capital		100000
	Drawings	1000
	Legal Service fees		15000
	Advertising expense	1500
	Uncollectible Expense	2200
	Depreciation expense	683
	Insurance expense	10000
	Interest expense	417
	Rent expense	20000
	Salaries expense	3000
	Supplies expense	150
	Utilities expense	250
	Totals	133850	133850