Reference no: EM132827536

Question - Practice Case

Sep 1, Julia contributed her own savings of $10,000 to start up the business. At the same time, she asked for her father to lend $20,000 to the business as a loan, bearing 12% interest. Total principal and interests payable in 1 year.

Sep 1, Julia paid one-year rent by cash of $12,000, and a one-year insurance premium of $6,000 for the company, both with coverage from Sep 1, 2020 to Aug 31, 2021.

Sep 2, Julia contributed her equipment to the business with a fair market value of $6,000, estimated remaining live of 3 years with no salvage value.

Sep 3, Julia purchased another equipment $7,000, paying $2,000 as a down payment, the rest is due in 30 days. This equipment has an estimated life of 5 years with $1,000 disposal value.

Sep 10, the company received $3,000 from client in advance for the service to be performed in a week.

Sep 15, Julia provided service to another client billed $5,000. The client promised to pay in 10 days.

Sep 17, Julia serviced the client who paid a week ago.

Sep 18, Julia provided service and received cash of $3,000.

Sep 30, received telephone and utilities bill totaled $200 for the month, payable early Oct.

Sep 30, the company does not collect the money from the service provided on Sep 15.

Required - Please help Julia to prepare the journal entries for the month of September.