Abe Factor opened a new accounting practice called X-factor Accounting and completed these activities during March 2014 — X-factor

Abe Factor opened a new accounting practice called X-factor Accounting and completed these activities during March 2014:

Mar 1 Invested $50,000 in cash and office equipment that had a fair value of $12,000.

1 Prepaid $9,000 cash for three months' rent for an office.

3 Made credit purchases of used office equipment for $6,000 and office supplies for $1,200.

5 Completed work for a client and immediately received $6,200 cash.

9 Completed a $4,000 project for a client, who will pay within 30 days.

11 Paid the account payable created on March 3.

15 Paid $3,000 cash for the annual premium on an insurance policy.

20 Received $1,500 as partial payment for the work completed on March 9.

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22 Placed an order with a supplier for $4,800 of supplies to be delivered April 7. They must be paid for within 15 days of being received.

23 Completed work for another client for $2,850 on credit.

27 Abe Factor withdrew $3,600 cash from the business to pay some personal expenses.

30 Purchased $650 of additional office supplies on credit.

31 Paid $860 for the month's utility bill.

Required

Prepare General Journal entries to record the transactions.

SOLUTION

	General Journal			Page 1
Date	Account Titles and Explanations	PR	Debit	Credit
2014
Mar. 1	Cash.........................................................................	101	50,000
	Office Equipment....................................................	163	12,000
	Abe Factor, Capital.............................................	301		62,000
	Invested cash and equipment to start the business.
1	Prepaid Rent............................................................	131	9,000
	Cash.....................................................................	101		9,000
	Prepaid three months’ rent.
3	Office Equipment....................................................	163	6,000
	Office Supplies........................................................	124	1,200
	Accounts Payable...............................................	201		7,200
	Purchased equipment and supplies on credit.
5	Cash.........................................................................	101	6,200
	Accounting Fees Earned....................................	401		6,200
	Received cash from client for completed work.
9	Accounts Receivable..............................................	106	4,000
	Accounting Fees Earned....................................	401		4,000
	Billed client for completed work.
11	Accounts Payable...................................................	201	7,200
	Cash.....................................................................	101		7,200
	Paid balance due on accounts payable.
15	Prepaid Insurance....................................................	128	3,000
	Cash......................................................................	101		3,000
	Paid annual premium for insurance.
20	Cash.........................................................................	101	1,500
	Accounts Receivable..........................................	106		1,500
	Collected part of the amount owed by a client.
Mar.	22 No entry.

23	Accounts Receivable..............................................	106	2,850
	Accounting Fees Earned....................................	401	2,850
	Billed client for completed work.
27	Abe Factor, Withdrawals........................................	302	3,600
	Cash.....................................................................	101	3,600
	Owner’s withdrawal of cash.
30	Office Supplies........................................................	124	650
	Accounts Payable...............................................	201	650
	Purchased supplies.
31	Utilities Expense.....................................................	690	860
	Cash.....................................................................	101	860
	Paid monthly utility bill.