Barbara Jones opened Barb’s Book Business on February 1. You have been hired to maintain the company’s financial records. The following transactions occurred in February, the first month of operations.
1. Received shareholders’ cash contributions on February 1 totaling $23,000 to form the corporation; issued 1,000 shares of common stock.
2. Paid $2,625 cash on February 2 for three months’ rent for office space.
TIP: For convenience, simply record the full amount of the payment as an asset (Prepaid Rent). At the end of the month, this account will be adjusted to its proper balance.
3. Purchased supplies on February 3 for $330 cash.
4. Signed a promissory note on February 4, payable in two years; deposited $15,600 in the company’s bank account.
5. On February 5, purchased equipment for $5,400 and land for $10,200.
6. Placed an advertisement in the local paper on February 6 for $740 cash.
7. Recorded sales on February 7 totaling $3,950; $1,700 was in cash and the rest on accounts receivable.
8. Collected accounts receivable of $114 from customers on February 8.
9. On February 9, repaired one of the computers for $139 cash.
10. Incurred and paid employee wages on February 28 of $850.