Reference no: EM131646438

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.