Assignment#1: Journal Entries

General Instructions

1. Individual assignment

2. Should be submitted till Friday 13 November before 12 AM.

3. Should be solved on Excel and submitted online through moellim
4. Delayed assignment is unacceptable and there is no second view about this.
5. The title of your assignment should have your name, assignment #, Section and SAP id. e.g,
ajid_00234_assignment_1
6. The assignment is attached to this post

Question1. The McMillan Corporation incorporated on September 2, 2011. The company

engaged in the following transactions during its first month of operations:

Sept. 2 Issued capital stock in exchange for $900,000 cash.

Sept. 4 Purchased land and a building for $350,000. The value of the land was $50,000, and the

value of the building was $300,000. The company paid $200,000 cash and issued a note payable

for the balance.

Sept. 12 Purchased office supplies for $600 on account. The supplies will last for several

months.

Sept. 19 Billed clients $75,000 on account.

Sept. 29 Recorded and paid salary expense of $24,000.

Sept. 30 received $30,000 from clients billed on September 19.

A partial list of the account titles used by the company includes:

Cash Notes Payable

Accounts Receivable
Accounts Payable

Office Supplies

Capital Stock

Land

Client Revenue

Building

Salary Expense

Required

a. Prepare journal entries, including explanations, for the above transactions.

b. Prepare ledger and trial balance

Question2. Herrold Consulting incorporated on February 1, 2011. The company engaged

in the following transactions during its first month of operations:

Feb. 1 Issued capital stock in exchange for $750,000 cash.

Feb. 5 Borrowed $50,000 from the bank by issuing a note payable.

Feb. 8 Purchased land, building, and office equipment for $600,000. The value of the land was

$100,000, the value of the building was $450,000, and the value of the office equipment was

$50,000. The company paid $300,000 cash and issued a note payable for the balance.

Feb. 11 Purchased office supplies for $600 on account. The supplies will last for several months.

Feb. 14 Paid the local newspaper $400 for a full-page advertisement. The ad will appear in print

on February 18.

Feb. 20 Several of the inkjet printer cartridges that Herrold purchased on February 11 were

defective. The cartridges were returned and the office supply store reduced Herrold’s outstanding

balance by $100.
Feb. 22 Performed consulting services for $6,000 cash.

Feb. 24 Billed clients $9,000.

Feb. 25 Paid salaries of $5,000.

Feb. 28 Paid the entire outstanding balance owed for office supplies purchased on February 11.

A partial list of the account titles used by the company includes:

Cash Notes Payable

Accounts Receivable

Accounts Payable

Office Supplies

Capital Stock

Land

Client Service Revenue

Building

Advertising Expense

Office Equipment

Salaries Expense

Required

a. Prepare journal entries, including explanations, for the above transactions.

b. Prepare Ledger and Trial Balance