Reference no: EM132620790

Graham Lyon opened Classic Computers on 1 April 2020. The business buys computers for $1,500 (GST exclusive) each and sells them for $2,900 (GST exclusive) each. Classic Computers uses the perpetual inventory system to record inventory transactions. The business used the accruals basis of accounting and is registered for GST. All transactions are shown as GST exclusive unless otherwise stated. The transactions of the business for April 2020 were as follows: March Graham invested $40,000 cash into the business. 2 Purchased store equipment costing $38,000, paying $8,000 in cash and borrowing the remainder on a 2-year loan. 2 Paid rent for April, May and June, $9,000. 4 Purchased 20 computers from A. Harris on credit. 6 Returned 2 defective computers to A. Harris and received a credit note. 10 Sold 5 computers to Harris Business Solutions on credit; terms 2/10, n/30 12 Purchased stationery supplies for cash costing $1,900. 15 Graham withdrew $2,000 cash. 18 Paid $750 to the local newspaper for advertising 19 Received payment from Harris Business Solutions for 10 April sales. 22 Paid A. Harris the balance outstanding. 23 Paid salary to sales assistant, $1,200. 29 Received a deposit of $1,000 (ignore GST) for a special order to be delivered to H. Kewell on 6 April 2016.

Additional information:

1. Store equipment is depreciated at 15% per year.
2. Stationery supplies on hand at 30 April 2020 was $640
3. Store cleaning expenses for April 2020 of $870 are unpaid and unrecorded. A tax invoice has been received.
4. Interest owing on the loan at 30 April is 2020 is $160.

Required:

Question a. Create general journal entries to record the above transactions for April 2020.

Question b. Record adjusting entries in the general journal for the month ending 30 April 2020.