on january 1 of the current year peter houston invested 100 000 cash into his compan 502418 | Homework Solutions
Journal entry preparation.
On January 1 of the current year, Peter Houston invested$100,000 cash into his company Muni Serv. Shortly thereafter, the company acquired selected assets of a bankrupt competitor. The acquisition included land ($15,000), a building ($40,000), and vehicles ($10,000). MuniServ paid $45,000 at the time of the transaction and agreed to remit the remaining balance due of $20,000 (an account payable) by February 15.During January, the company had additional cash outlays for the following items:
Purchases of store equipment
$4,600
Loan payment
500
Salaries expense
2,300
Advertising expense
700
The January utilities bill of $200 was received on January 31 and will be paid on February 10.MuniServ rendered services to clients on account amounting to $9,400 and $3,700 had been received in settlement.
Instructions
a. Present journal entries that reflect MuniServ’s January transactions, starting with the$100,000 investment.
b. Compute the total debits, total credits, and ending balance that would be found in the company’s Cash account.
c. Prepare a trail balance as of January 31.
