Journal
1-Dec Cash $ 200,000
Capital Stock $ 200,000
Owner invested cash in the business.
1-Dec Rental Equipment $ 249,600
Cash $ 134,000
Notes Payable $ 115,600
Purchased equipment from Rent-it. Note payable
is due in one year.
1-Dec Prepaid Rent $ 9,300
Cash $ 9,300
Paid three months' rent in advance to Shapiro
Realty.
4-Dec Office Supplies $ 1,900
Accounts Payable $ 1,900
Purchased supplies on account; payment due in
30 days.
8-Dec Cash $ 8,600
Unearned Rental Fees $ 8,600
Received advance payment for equipment rental
by McNamer Construction Company.
12-Dec Salaries Expense $ 4,300
Cash $ 4,300
Paid salaries for first two weeks in December.
15-Dec Cash $ 12,200
Accounts Receivable $ 6,400
Rental Fees Earned $ 18,600
17-Dec Maintenance Expense $ 700
Accounts Payable $ 700
To record purchase of repair parts on account
from Earth Movers, Inc.; payment due in 10 days.
23-Dec Cash $ 2,300
Accounts Receivable $ 2,300
Collection of an accounts receivable.
26-Dec (No entry required to record rental of backhoe.)
26-Dec Salaries Expense $ 4,300
Cash $ 4,300
Paid biweekly payroll.
27-Dec Accounts Payable $ 700
Cash $ 700
Paid account payable to Earth Movers, Inc.
28-Dec Dividends $ 2,000
Dividends Payable $ 2,000
Declared a dividend of 12 cents per share payable
on January 1
29-Dec (No journal entry required to record lawsuit.)
29-Dec Unexpired Insurance $ 8,880
Cash $ 8,880
Purchased 12-month liability policy, effective
31-Dec Utilities Expense $ 670
Accounts Payable $ 670
Utilities for December; payment due in 30 days.
31-Dec Cash $ 16,400
Accounts Receivable $ 4,500
Rental Fees Earned $ 20,900
To record rental fees earned in the second half
of December.
31-Dec Rent Expense $ 3,100
Prepaid Rent $ 3,100
To recognize rent expense (9000*1/3)
31-Dec Interest Expense $ 578
Interest Payable $ 578
Interest on note payable to Rent-It ($115,600 x 6%
x 1/12).
31-Dec Depreciation Expense $ 2,600
Accumulated Depreciation: Rental Equip. $ 2,600
($249,600 ÷ 8 years x 1/12)
31-Dec Office Supplies Expense $ 1,260
Office Supplies $ 1,260
(1900-640)
31-Dec Unearned Rental Fees $ 4,400
Rental Fees Earned $ 4,400
To record portion of advance payment by McNamer
Construction Co. earned during December.
31-Dec Accounts Receivable $ 1,980
Rental Fees Earned $ 1,980
To record fees earned from Mission Landscaping
on backhoe rental (6 days x $330 per day).
31-Dec Salaries Expense $ 1,700
Salaries Payable $ 1,700
To record accrued salaries payable at month-end.
31-Dec Income Taxes Expense $ 8,002
Income Taxes Payable $ 8,002
31-Dec Service revenue $ 45,880
Income summary $ 45,880
31-Dec Income summary $ 27,210
Salaries Expense $ 10,300
Maintenance Expense $ 700
Utilities Expense $ 670
Rent Expense $ 3,100
Office Supplies Expense $ 1,260
Depreciation Expense $ 2,600
Interest Expense $ 578
Income tax exp. $ 8,002
31-Dec Income summary $ 18,670
Retained earnings $ 18,670
31-Dec Retained earnings $ 2,000
Dividends $ 2,000
