“On October 1,2011, Santana Rey launched a computer services company called Business Solutions, which provides
consulting services, computer system installations, and custom program
development. Rey adopts the calendar year for reporting purposes and expects to
prepare the company’s first set of financial statements on December31, 2011.
The company’s initial chart of accounts follows, Account No. Cash 101 Accounts
Receivable 106 Computer Supplies 126 Prepaid Insurance 128 Prepaid Rent 131
Office Equipment 163 Computer Equipment 167 Accounts payable 201 S. Rey,
Capital 301 S. Rey, Withdrawals 302 Computer Service Revenue403 Wages Expense
623 Advertising Expense 655 Mileage Expense 676 Miscellaneous Expenses 677
Repairs Expense-Computer684 Required: 1. Prepare journal entries to record each
of the following transactions for Business Solutions, Oct. 1 S. Rey invested
$45,000 cash, a $20,000 computer system, and $8,000 of office equipment in the
company 2 The company paid #3,300 cash for four months’ rent(Hint: Debit

Prepaid Rent for $3,300) 3 The company purchased $1,420 of computer supplies on
credit from Harris Office Products. 5 The company paid $2,220 cash for one
year’s premium on property and liability insurance policy (Hint: Debit Prepaid
Insurance for $2,220) 6 The company billed Easy Leasing $4,800 for services
performed in installing a new Web server. 8 The company paid $1,420 cash for
the computer supplies purchased from Harris Office Products on October 3. 10
The company hired Lyn Addie as a part-time assistant for $125 per day, as
needed. 12 The company billed Easy Leasing another $1,400 for services
performed. 15 The company received $4,800 cash from Easy Leasing as partial
payment on its account 17 The company paid $805 cash to repair computer
equipment that was damaged when moving it. 20 The company paid $1,728 cash for
advertisements published in the local newspaper. 22 The company received $1,400
cash from Easy Leasing on its account 28 The company billed IFM Company $5,208
for services performed 31 The company paid $875 cash for Lyn Addie’s wages for
seven days’ work 31 S. Rey withdrew $3,600 cash from the company for personal
use. Nov. 1 The company reimbursed S. Rey in cash for business automobile
mileage allowance (Rey loged 1,000 miles at $0.32 per mile) 2 The company
received $4,633 cash from Liu Corporation for computer services performed. 5
The company purchased computer supplies for $1,125 cash from Harris Office
Products. 8 The company billed Gomez Co. $ 5,668 for services performed 13 The
company received notification from Alex Engineering Co. that Business
Solutions’ bid of $3,950 for an upcoming project is accepted. 18 The company
received $2,208 cash from IFM Company as partial payment of the October 28
bill. 22 The company donated $250 cash to the United Way in the company’s name.
24 The company completed work for Alex’s Engineering Co. and sent it a bill for
$3,950. 25 The company sent another bill to IFM Company for the past-due amount
of $3,000. 28 The company reimbursed S. Rey in cash for business automobile
mileage (1,200 miles at $0.32 per mile). 30 The company paid $1,750 cash for
Lyn Addie’s wages for 14 days’ work. 30 S. Rey withdrew $2,000 cash from the
company for personal use. 2. Open ledger accounts ( in balance column format )
and post the journal entries from part 1 to them. 3. Prepare a trial balance as
of the end of November.On October 1,2011, Santana Rey
launched a computer services company called Business Solutions, which provides
consulting services, computer system installations, and custom program
development. Rey adopts the calendar year for reporting purposes and expects to
prepare the company’s first set of financial statements on December31, 2011.
The company’s initial chart of accounts follows, Account No. Cash 101 Accounts
Receivable 106 Computer Supplies 126 Prepaid Insurance 128 Prepaid Rent 131
Office Equipment 163 Computer Equipment 167 Accounts payable 201 S. Rey,
Capital 301 S. Rey, Withdrawals 302 Computer Service Revenue403 Wages Expense
623 Advertising Expense 655 Mileage Expense 676 Miscellaneous Expenses 677
Repairs Expense-Computer684 Required: 1. Prepare journal entries to record each
of the following transactions for Business Solutions Oct. 1 S. Rey invested
$45,000 cash, a $20,000 computer system, and $8,000 of office equipment in the
company 2 The company paid #3,300 cash for four months’ rent(Hint: Debit
Prepaid Rent for $3,300) 3 The company purchased $1,420 of computer supplies on
credit from Harris Office Products. 5 The company paid $2,220 cash for one
year’s premium on property and liability insurance policy (Hint: Debit Prepaid
Insurance for $2,220) 6 The company billed Easy Leasing $4,800 for services
performed in installing a new Web server. 8 The company paid $1,420 cash for
the computer supplies purchased from Harris Office Products on October 3. 10
The company hired Lyn Addie as a part-time assistant for $125 per day, as
needed. 12 The company billed Easy Leasing another $1,400 for services
performed. 15 The company received $4,800 cash from Easy Leasing as partial
payment on its account 17 The company paid $805 cash to repair computer
equipment that was damaged when moving it. 20 The company paid $1,728 cash for
advertisements published in the local newspaper. 22 The company received $1,400
cash from Easy Leasing on its account 28 The company billed IFM Company $5,208
for services performed 31 The company paid $875 cash for Lyn Addie’s wages for
seven days’ work 31 S. Rey withdrew $3,600 cash from the company for personal
use. Nov. 1 The company reimbursed S. Rey in cash for business automobile
mileage allowance (Rey loged 1,000 miles at $0.32 per mile) 2 The company
received $4,633 cash from Liu Corporation for computer services performed. 5
The company purchased computer supplies for $1,125 cash from Harris Office
Products. 8 The company billed Gomez Co. $ 5,668 for services performed 13 The
company received notification from Alex Engineering Co. that Business
Solutions’ bid of $3,950 for an upcoming project is accepted. 18 The company
received $2,208 cash from IFM Company as partial payment of the October 28
bill. 22 The company donated $250 cash to the United Way in the company’s name.
24 The company completed work for Alex’s Engineering Co. and sent it a bill for
$3,950. 25 The company sent another bill to IFM Company for the past-due amount
of $3,000. 28 The company reimbursed S. Rey in cash for business automobile
mileage (1,200 miles at $0.32 per mile). 30 The company paid $1,750 cash for
Lyn Addie’s wages for 14 days’ work. 30 S. Rey withdrew $2,000 cash from the
company for personal use. 2. Open ledger accounts ( in balance column format )
and post the journal entries from part 1 to them. 3. Prepare a trial balance as
of the end of November.”