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Aracel Engineering completed the following transactions in the month of June.
Aracel Engineering completed the following transactions in the month of June.a. Jenna Aracel, the owner, invested $100,000 cash, office equipment with a value of $5,000, and $60,000 of drafting equipment to launch the company.
b. The company purchased land worth $49,000 for an office by paying $6,300 cash and signing a long-term note payable for $42,700.
c. The company purchased a portable building with $55,000 cash and moved it onto the land acquired.
d. The company paid $3,000 cash for the premium on an 18-month insurance policy.
e. The company completed and delivered a set of plans for a client and collected $6,200 cash.
f. The company purchased $20,000 of additional drafting equipment by paying $9,500 cash and signing a long-term note payable for $10,500.
g. The company completed $14,000 of engineering services for a client. This amount is to be received in 30 days.
h. The company purchased $1,150 of additional office equipment on credit.
i. The company completed engineering services for $22,000 on credit.
j. 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.
k. The company collected $7,000 cash in partial payment from the client described in transaction g.
l. The company paid $1,200 cash for wages to a drafting assistant.
m. The company paid $1,150 cash to settle the account payable created in transaction h.
n .The company paid $925 cash for minor maintenance of its drafting equipment.
o. Jenna Aracel withdrew $9,480 cash from the company for personal use.
p. The company paid $1,200 cash for wages to a drafting assistant.
q. The company paid $2,500 cash for advertisements on the Web during June.
Required:
1. Prepare general journal entries to record these transactions using the following titles: Cash (101); Accounts Receivable (106); Prepaid Insurance (108); Office Equipment (163); Drafting Equipment (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); J. Aracel, Capital (301); J. Aracel, Withdrawals (302); Engineering Fees Earned (402); Wages Expense (601); Equipment Rental Expense (602); Advertising Expense (603); and Repairs Expense (604).
Answer:Aracel EngineeringGeneral Journal Entries:a. Debit Cash (101) $100,000Debit Office Equipment (163) $5,000Debit Drafting Equipment (164) $60,000Credit J. Aracel, Capital (301) $165,000To record the owner's investments in the business.b. Debit Land (172) $49,000Credit Cash (101) $6,300Credit Notes Payable (250) $42,700To record the purchase of land for cash and note.c. Debit Building (170) $55,000Credit Cash (101) $55,000To record the purchase of a portable building.d. Prepaid Insurance (108) $3,000Credit Cash (101) $3,000To record the prepayment of insurance premium for 18 months.e. Debit Credit Cash (101) $6,200Credit Engineering Fees Earned (402) $6,200To record the completion of plans for cash.f. Debit Drafting Equipment (164) $20,000Credit Credit Cash (101) $9,500Credit Notes Payable (250) $10,500To record the purchase of additional drafting equipment.g. Debit Accounts Receivable (106) $14,000Credit Engineering Fees Earned (402) $14,000To record the completion of engineering services for a client.h. Debit Office Equipment (163) $1,150Credit Accounts Payable (201) $1,150To record the purchase of additional office equipment on account.i. Debit Accounts Receivable (106) $22,000Credit Engineering Fees Earned (402) $22,000To record the completion of engineering services for a client.j. Debit Equipment Rental Expense (602) $1,333Credit Accounts Payable (201) $1,333To record the accrual of rent expense.k. Debit Credit Cash (101) $7,000Credit Accounts Receivable (106) $7,000To record the partial payment from the client in transaction g.l. Debit Wages Expense (601) $1,200Credit Cash (101) $1,200To record the payment of wages.m. Debit Accounts Payable (201) $1,150Credit Cash (101) $1,150To record the full settlement of transaction h account.n. Debit Repairs Expense (604) $925Credit Credit Cash (101) $925To record the payment for minor maintenance.o. Debit J. Aracel, Withdrawals (302) $9,480Credit Cash (101) $9,480To record the personal withdrawal by Jenna Aracel.p. Debit Wages Expense (601) $1,200Credit Cash (101) $1,200To record the payment of wages.q. Debit Advertising Expense (603) $2,500Credit Cash (101) $2,500To record the payment of Web advertisements.Explanation:a) Data and Account Titles:Cash (101)Accounts Receivable (106)Prepaid Insurance (108)Office Equipment (163)Drafting Equipment (164)Building (170)Land (172)Accounts Payable (201)Notes Payable (250)J. Aracel, Capital (301)J. Aracel, Withdrawals (302)Engineering Fees Earned (402)Wages Expense (601)Equipment Rental Expense (602)Advertising Expense (603)Repairs Expense (604)...