Problem - Record transactions in journal, post to T-accounts, and prepare trial balance
Economy Laundry Company had the following transactions in August 2012:
Aug. 1 Issued capital stock for cash, $150,000.
3 Borrowed $40,000 from the bank on a note.
4 Purchased cleaning equipment for $25,000 cash.
6 Performed services for customers who promised to pay later, $16,000.
7 Paid this month's rent on a building, $2,800.
10 Collections were made for the services performed on August 6, $3,200.
14 Supplies were purchased on account for use this month, $3,000.
17 A bill for $400 was received for utilities for this month.
25 Laundry services were performed for customers who paid immediately, $22,000.
31 Paid employee salaries, $6,000.
31 Paid cash dividend, $2,000.
1. a. Make journal entries for these transactions.
2. b. Post the journal entries to T-accounts. Enter the account number in the Posting Reference column of the journal as you post each amount. Use the following account numbers:
Acct. No. Account Title
100 Cash
103 Accounts Receivable
170 Equipment
200 Accounts Payable
201 Notes Payable
300 Capital Stock
320 Dividends
400 Service Revenue
507 Salaries Expense
511 Utilities Expense
515 Rent Expense
518 Supplies Expense
c. Make trial balance as of August 31, 2012.