Accounting-You have secured a loan through “PSU Bank

| January 30, 2017

Question
You have secured a loan through “PSU Bank”

$48,000 principle
Length of note: 5 years
Interest: 1 1/2 % (could be expressed as 1.5%)
Appropriateprincipalandaccruedinteresttoberepaidattheendofeachyeartheloanisoutstanding(i.e.,thenextpaymentwillbeOctoberofnextyear).
Day2
Buy office supplies: $100
Rent office equipment: $150/month- pay 3 months worth
Rent office space $1500/month- pay 3 months worth and 1 month security deposit (same dollar amount as the monthly rent)
– “Security Deposit” usually listed as an Asset;

same amount as one month’s rent

Securebasicinsurance:$100/month-pay6monthsworthNote:eventhoughthesetransactionsoccurredonDay2,anynecessaryadjustmentswillbemadeforthefullmonth.
Day 3
Hire a receptionist: salary: $275/week- Pay on bi-weekly basis – first pay day is Day 12- Work schedule: Mon-Fri 9am-5pm- Today is the first day of employment
Day 4

Provide 120 units of service -70on account and50 for cash
Yoursellingpriceis$26.50
Day 12
Payyourreceptionistnowandeverytwoweeksfromhere
Day18
Collectonallaccountsreceivableoutstanding.
Day 30

The 3 corporate directors want a dividend payment.
Can you? The answer is no,why not?

Instead, since they are also officers of the company, pay each of them a salary of $100

Usingthe process for a general ledger system,
prepare the following for your first month of operation:

Trial Balance
Make necessary adjustments(Note: The Receptionist calculates $45 of office suppliesare on hand.)
Adjusted Trial Balance
Close the books for the month and preparethe following financial statements:

Income Statement
Balance Sheet

ProduceaPost-closingTrialBalance

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