Question

Prepare journal entries（Only BOLD part）：

Jan. 1         Sold 5,000 shares of capital stock for a total of $500,000 cash.

Jan. 2         Paid the premium of $12,000 on a 24-month insurance policy on all assets.

Jan. 3         Purchased land and a building for a total of $350,000 cash. The land is valued at $50,000, while the building is valued at $300,000 and is expected to have a useful life of 30 years.

Jan. 10          Purchased a computer network system for $36,000 cash. The expected useful life is 6 years.

Jan. 15          Paid $2,400 cash for a phone system that should have a 3-year useful life.

Jan. 16          Paid cash to acquire equipment and furniture for business purposes at a cost of $12,000. The expected useful life is 4 years.

Jan. 19          Purchased office supplies for $1,250 cash. (Use the asset account “Office Supplies” for such purchases.)

Jan. 24          Paid cash of $10,000 for binders, manuals, and workbooks for use in Sheldon's client programs. Sheldon's policy is to initially record these materials as an asset (Program Supplies) and to then expense the materials used for a particular training program when the program is completed.

Jan. 30          Paid wages of $1,800 and salaries of $3,600 for work performed during January.

Feb. 14         Completed the first client program for a fee of $9,500. The customer paid $2,500 of the fee that day, with the remainder billed on account. Program supplies used on the project had originally cost Sheldon $1,500.

Feb. 15         Paid wages of $2,400 in cash.

Feb. 19         Paid utilities for the month of January of $1,050 in cash.

Feb. 23         Purchased on account 30 specialized manuals as program supplies for use in computer training for a total of $1,800.

Feb. 28         Borrowed $45,000 from the bank on a 2-year note. The interest rate on the note is 6% per year (or 0.5% per month).

Answer 1

Date	Account Titles and Explanation	Debit	Credit
Feb. 14	Cash	2500
	Accounts receivable	7000
	Service revenue		9500
	(To record revenue earned)
Feb. 14	Program supplies expense	1500
	Program supplies		1500
	(To record program supplies used)
Feb. 15	Wages expense	2400
	Cash		2400
	(To record wages paid in cash)
Feb. 19	Utilities payable	1050
	Cash		1050
	(To record utilities paid for January)
Feb. 23	Program supplies	1800
	Accounts payable		1800
	(To record program supplies purchased on account)
Feb. 28	Cash	45000
	Notes payable		45000
	(To record borrowings against note payable)

Note: January utilities of $1050 are assumed to have been accrued in January and hence debited to utilities payable at the time of payment on Feb. 19.