General Journal

Date Accounts Post Ref.

1 Cash
Owner's Capital
The owner invested cash

2 Cash
Notes Payable
Bank loan

3 Equipment
Cash
The company acquired equipment

4 Prepid rent
Cash
The company paid sic month's advance for rent

5 Cash
Fees Earned
Rendered Services

6 Utilities expense
Cash
The company paid bills

7 Owner's drawing
Cash
The owner withdrew a cash

Adjusting Entries Account Debit

2 Interest expense 2,000
Interest payable

3 Depreciation Expense - Equipment 5,000

Acculumated Depreciaiton - Equipment

4 Prepaid Expense 18,000

Prepaid Rent

5 Salaries Expense 8,000

Salaries Payable
Financial Statements Entity B
Income Statement
For the Year Ended December 31, 20x1

Incomes
Fees Earned 260,000
Expenses
Depreciation Expense
Utilities Expense
Interest Expense
Rent Expense
Salaries Expense
Total Expenses
Net Income 212,000

Closing Entries
Income Debit
Service fees 260,000
Income Summary
Expenses
Expense Summary 48,000
Depreciation Expense
Utilities Expense
Interest Expense
Rent Expens
Salaries Expense

Owner's Equity
Income Summary 212,000
Capital

Capital 50,000
Drawing

WORKSHEET

Acccounts Unadjusted trial Balance

 Dr
Cash 367,000
Equipment 240,000
Prepaid rent 108,000
notes payable
capital
drawings 50,000
Fees earnedd
Utilities expense 15,000
TOTAL 780,000

Adjustments:
Acc. Dep. -equipment
Interest payable
Salaries payable
Depreciation expense
Salaries expense
Interest expense
Rent expense
TOTAL
 T-account

Cash
Debit Credit 320,000
320,000 200,000
320,000 240,000
108,000
260,000
200,000 15,000
200,000 50,000
367,000

240,000 Notes payable

240,000 200,000
200,000

108,000
108,000 Fees earned
260,000
260,000
260,000
260,000
UTB
Entity B
15,000 Unadjusted Trial Balance
15,000 December 31, 20x1

Cash
50,000 Equipment
50,000 Prepaid Rent
Notes payable
Owner's Capital
Credit Owner's Drawing
(200,000 x 12% / 12) Fees earned
2,000 Utilities Expense

(240,000 / 4 years = 60,000 / 12 moths)

5,000

(108,000 / 6 months)
18,000

8,000
 Entity B
Statement of Owner's Equity
For the Year Ended December 31, 20x1

Owner's Equity at the beginning

Add:
Owner's capital
5,000 Net Income
15,000 Deduct:
2,000 Owner's drawing
18,000 Owner's Equity at Decemeber 31, 20x1
8,000
48,000

Credit Post-closing trial balance

260,000

5,000
15,000
2,000
18,000
8,000

(260,000-48,000)
212,000

50,000

For the year ended Dec. 31, 20x

nadjusted trial Balance AJE#'S Adjustments AJE #'s Adjusted Trial Balance
Cr Dr Cr Dr
367,000
240000
200,000 18000 90,000
320,000

260,000 50000

15000
780000

5000
2000
8000
5000 5000
8000 8000
2000 2000
18000 18000
795,000
 Equipment Prepaid Rent
240,000 108,000
240,000 108,000
Adjusting 18,000
90,000

Owner's Capital Owner's Drawing

320,000 50,000
320,000 50,000

Utilities Expense Interes Expense

15,000 Adjusting 2,000
15,000

ATB
Entity B Entity B
adjusted Trial Balance Adjusted Trial Balance
December 31, 20x1 December 31, 20x1
Debit Credit
367,000 Cash
240,000 Equipment
108,000 Acculumulated Dep. - Equipment
200,000 Prepaid Rent
320,000 Notes Payable
50,000 Interest Payable
260,000 Salaries Payable
15,000 Owner's Capital
780,000 780,000 Owner's Drawing
Fees Earned
Depreciation Expense
Utilities Expense
Interest Expense
Rent Expense
Salaries Expense
 Entity B
Balance Sheet
December 31, 20x1
Assets
Cash
Equipment
320,000 Acculumated Dep. - Equipment
212,000 Prepaid Rent
TOTAL ASSETS:
-50,000 Liabilities and Equity
482,000 Notes payable
Interest payable
Salaries payable
Owner's Equity
TOTAL LIABILITIES AND EQUITY:

Entity B
Post-Closing Trial Balance
December 31, 20x1
Debit Credit
Cash 367,000
Equipment 240,000
Accumulated Dep. - Equipment 5,000
Prepaid Rent 90,000
Notes payable 200,000
Interest payable 2,000
Salaries payable 8,000
Capital 482,000
697,000 697,000

Entity B
Worksheet
For the year ended Dec. 31, 20x1

Adjusted Trial Balance Income statement Balance sheet Closing entries

Cr Dr Cr Dr Cr Dr
367,000
240000
90,000
200000 200000
320000 320000 50000
50000
260000 260000 260000
15000

5000 5000
2000 2000
8000 8000
5000
8000
2000
18000
795000 48000 260000 747,000 535000 310000
212000 (NI)
260000 260000 747000 747000
 Acculumated Dep. - Equipment
Adjusting 5,000
5,000

Interest Payable Salaries Payable

Adjusting 2,000 Adjusting 8,000
2,000 8,000

Rent Expense Deprecition Expense Salaries Expense

Adjusting 18,000 Adjusting 5,000 Adjusting 8,000
18,000 5,000 8,000

djusted Trial Balance

December 31, 20x1
Debit Credit
367,000
240,000
5,000
90,000
200,000
2,000
8,000
320,000
50,000
260,000
5,000
15,000
2,000
18,000
8,000
795,000 795,000
 Debit Credit
367,000
240,000
5,000
90,000
692,000

200,000
2,000
8,000
482,000
692,000

Closing entries Post closing trial balance

Cr Dr Cr
367,000
240000
90,000
200000
212000 482000
50000

15000

5000
2000
8000
5000
8000
2000
18000
310000 697,000 697000
Salaries Expense