Question

Trafalgar Estate Agency started operations on January 01, 2020. The following transactions occurred in the first month of operations:
January 01 Owner of the business Mr. Miller invested $30,000 cash in the business.



January 03 Purchased office supplies worth $1,500 on credit.



January 06 Purchased office equipment for $7,500; paying $2,500 in cash and signed a 30-day, $5,000 note payable.



January 12 Real estate commission billed to clients amount to $12,000.





January 20 Paid cash on account for office supplies purchased on January 03.



January 27 Received a check for $4,000 from a client in payment on account for commissions billed on January 12.



January 30 Received a telephone bill for $120 due next month.

Requirements:

Enter these transactions in General Journal of Trafalgar Estate Agency.
Post these transactions to appropriate ledger accounts.
Prepare a trial balance for the month of January 31, 2020.

Answer 1

Answer:

Cash (Dr.) $30,000

Capital (Cr.) $30,000

Office Supplies (Dr.) $1,500

Accounts Payable (Cr.) $1,500

Office equipment (Dr.) $7,500

Cash (Cr.) $2,500

Note Payable (Cr.) $5,000

Accounts Receivable (Dr.) $12,000

Real estate commission (Cr.) $12,000

Accounts Payable (Dr.) $1,500

Cash (Cr.) $1,500

Real Estate Commission (Dr.) $4,000

Accounts Receivable (Cr.) $4,000

Explanation:

Trial Balance :

Debits :

Cash $26,000

Office Equipment $7,500

Office Supplies $1,500

Commission received $4,000

Accounts Receivable $8,000

Total $47,000

Credits :

Capital $30,000

Notes Payable $5,000

Revenue Commission $12,000

Total $47,000