Question & Answer: Jenna Aracel opened a business called Aracel Engineering and recorded the following transactions in its first month of operations Jun. 1…..

For the journal entry I don’t believe I did it right, can you correct it?

Jenna Aracel opened a business called Aracel Engineering and recorded the following transactions in its first month of operations Jun. 1Jenna Aracel, the owner, invested $100,000 cash, office equipment with a value of $5,000, and $60,000 of drafting equipment Jun. 2 The company purchased land worth $49,000 for an office by paying $6,300 cash and signing a long-term note payable for to launch the company in exchange for common stock. $42,700 Jun. 2 The company purchased a portable building with $55,000 cash and moved it onto the land acquired on June 2. Jun. 2 The company paid $3,000 cash for the premium on a 18-month insurance policy Jun. 7 The company completed and delivered a set of plans for a client and collected $6,200 cash Jun. 12 The company purchased $20,000 of additional drafting equipment by paying $9,500 cash and signing a long-term note payable for $10,500 Jun. 14 The company completed $14,000 of engineering services for a client. This amount is to be received in 30 days Jun. 15 The company purchased $1,150 of additional office equipment on credit. Jun. 17 The company completed engineering services for $22,000 on credit. Jun. 18 The company received a bill for rent of equipment that was used on a recently completed job. The $1,333 rent cost must be paid within 30 days Jun. 20 The company collected $7,000 cash in partial payment from the client billed on June 14 Jun. 21 The company paid $1,200 cash for wages to a drafting assistant Jun. 23 The company paid $1,150 cash to settle the account payable created on June 15 Jun. 24 The company paid $925 cash for minor maintenance of its drafting equipment. Jun. 26 The company paid $9,480 cash in dividends Jun. 28 The company paid $1,200 cash for wages to a drafting assistant. Jun. 30 The company paid $2,500 cash for advertisements on the web during June. Descriptions of items that require adjusting entries on June 30, 2017, follow. a) The company has completed, but not yet billed, $6,000 of engineering services for a client. b) Straight-line depreciation on the office equipment, assuming a 5-year life and a $150 salvage value, is $100 per month c) Straight-line depreciation on the drafting equipment, assuming a 5-year life and a $2,000 salvage value, is $1,300 per month d) Straight-line depreciation on the building, assuming a 25-year life and a $1,000 salvage value, is $180 per month e) The balance in prepaid insurance represents a 15-month policy that went into effect on June 1 f) Accrued interest on the long-term note payable is $75 g) The drafting assistant is paid $1,200 for a 5-day work week. 2 days’ wages have been incurred but are unpaid as of month-end

Expert Answer

Date	Account title	Debit	Credit
Jun 1	Cash.	100,000
	Office Equipment	5,000
	Drafting Equipment	60,000
	Common Stock		165,000
	Owner invested cash and equipment.

Jun 2	Land	49,000
	Cash		6,300
	Note Payable		42,700
	Purchased land with cash and note payable.

Jun 2	Building	55,000
	Cash		55,000
	Purchased building.

Jun 2	Prepaid Insurance	3,000
	Cash		3,000
	Purchased 15-month insurance policy

Jun 7	Cash	6,200
	Engineering Fees Earned		6,200
	Collected cash for completed work

Jun 12	Drafting Equipment	20,000
	Cash		9,500
	Note Payable		10,500
	Purchased equipment with cash and note payable

Jun 14	Accounts Receivable	14,000
	Engineering Fees Earned		14,000
	Completed services for client

Jun 15	Office Equipment	1,150
	Accounts Payable		1,150
	Purchased equipment on credit

Jun 17	Accounts Receivable	22,000
	Engineering Fees Earned		22,000
	Billed client for completed work

Jun 18	Equipment Rental Expense	1,333
	Accounts Payable		1,333
	Incurred equipment rental expense

Jun20	Cash	7,000
	Accounts Receivable		7,000
	Collected cash on account

Jun 21	Wages Expense	1,200
	Cash		1,200

Jun23	Accounts Payable	1,150
	Cash		1,150
	Paid amount due on account

Jun 24	Repairs Expense	925
	Cash		925
	Paid for repair of equipment

Jun 26	Dividends	9,480
	Cash		9,480
	Paid cash for dividends

Jun 28	Wages Expense	1,200
	Cash		1,200

Jun 30	Advertising Expense	2,500
	Cash		2,500
	Paid for advertising expense

Adjusting Entries
Date	Account title	Debit	Credit
a.	Accounts Receivable	6,000
	Engineering Fees Earned		6,000

b.	Depreciation Expense	100
	Accumulated Depreciation-Office equipment		100

c.	Depreciation Expense	1,300
	Accumulated Depreciation-Drafting equipment		1,300

d.	Depreciation Expense	1,300
	Accumulated Depreciation-Building		1,300

e.	Insurance Expense(3000/15)	200
	Prepaid Insurance		200

f.	Interest expense	75
	Interest payable		75

g.	Wages expense	240
	Wages payable		240

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