F104 Case Study 1

REQUIREMENT #1:

During its first month of operation, the Rawls Repair Corporation, which specializes in bicycle repairs,

completed the following transactions:

Oct. 1 Began business by making a deposit in a company bank account of $12,000, in exchange

for 1,200 shares of $10 par value common stock.

Oct. 1 Paid the premium on a one-year insurance policy, $1,200.

Oct. 1 Paid the current month's rent, $1,040.

Oct. 3 Purchased repair equipment from Conklin Company, $4,400. Paid $600 down and the balance was

placed on account. Payments will be $200.00 per month for nineteen months. The first payment is due 11/1.

Note: Use Accounts Payable for the Balance Due.

Oct. 8 Purchased repair supplies from McKenna Company on credit, $390.

Oct. 12 Paid utility bill for October, $154.

Oct. 16 Cash bicycle repair revenue for the first half of October, $1,362.

Oct. 19 Made payment to McKenna Company, $200.

Oct. 31 Cash bicycle repair revenue for the last half of October, $1,310.

Oct. 31 Declared and paid cash dividend of $800.

Prepare journal entries to record the October transactions in the General Journal below. Use the following account names for journal entries.

General Journal Chart of Accounts

Date Description(Account Name) Debit Credit

Oct. 1 Cash 12000 Assets

Oct. 1 Common Stock 12000 Cash

Oct. 1 Insurance Expense 1200 Prepaid Insurance