Byte of Accounting, Inc. General Journal Need help with 27 through 39TransactionDescription of transaction01.June 1: Byte of Accounting, Inc. acquired $91,800 in cash from Lauryn and issued 3,400 shares of its common stock.02.June 1: Byte of Accounting, Inc. issued 2,600 shares of its common stock to Johnnie Rhame after $29,160 in cash and computer equipment with a fair market value of $41,040 were received.03.June 1: Byte of Accounting, Inc. issued 2,368 shares of its common stock after acquiring from Courtney $47,250 in cash, computer equipment with a fair market value of $15,660 and office equipment with a fair value of $1,026.04.June 2: A down payment of $29,000 in cash was made on additional computer equipment that was purchased for $145,000. A five- year note was executed by Byte for the balance.05.June 4: Additional office equipment costing $700 was purchased on credit from Discount Computer Corporation.06.June 8: Unsatisfactory office equipment costing $140 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte.07.June 10: Byte paid $22,250 on the balance it owed on the June 2 purchase of computer equipment.08.June 14: A one-year insurance policy covering its computer equipment was purchased by Byte for $6,144 in cash. The effective date of the policy was June 16.09.June 16: A check in the amount of $8,000 was received for consulting revenue.10.June 16: Byte purchased a building and the land it is on for $101,000, to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $16,000. The balance of the cost is to be allocated to the building. Byte made a cash down payment of $10,100 and executed a mortgage for the balance. The mortgage is payable in eight equal annual installments beginning July 1.11.June 17: Cash of $6,800 was paid for rent for June, July, August and September. Put the total amount into the Prepaid Rent account.12.June 17: Received a bill of $450 from the local newspaper for advertising.13.June 21: Accounts payable in the amount of $560 were paid.14.June 21: A fax machine for the office was purchased for $775 cash.15.June 21: Billed various miscellaneous local customers $4,800 for consulting services performed.16.June 22: Paid salaries of $1,010 to equipment operators for the week ending June 18.17.June 22: Received a bill for $1,215 from Computer Parts and Repair Co. for repairs to the computer equipment.18.June 22: Paid the advertising bill that was received on June 17.19.June 23: Purchased office supplies for $505 on credit. Record the purchase as an increase to the assets.20.June 23: Cash in the amount of $3,845 was received on billings.21.June 28: Billed $5,385 to miscellaneous customers for services performed to June 25.22.June 29: Paid the bill received on June 22, from Computer Parts and Repairs Co.23.June 29: Cash in the amount of $5,101 was received for billings.24.June 29: Paid salaries of $1,010 to equ.

1. Byte of Accounting, Inc.
General Journal
Need help with 27 through 39TransactionDescription of transaction01.June 1: Byte of
Accounting, Inc. acquired $91,800 in cash from Lauryn and issued 3,400 shares of its common
stock.02.June 1: Byte of Accounting, Inc. issued 2,600 shares of its common stock to Johnnie
Rhame after $29,160 in cash and computer equipment with a fair market value of $41,040 were
received.03.June 1: Byte of Accounting, Inc. issued 2,368 shares of its common stock after
acquiring from Courtney $47,250 in cash, computer equipment with a fair market value of
$15,660 and office equipment with a fair value of $1,026.04.June 2: A down payment of $29,000
in cash was made on additional computer equipment that was purchased for $145,000. A five-
year note was executed by Byte for the balance.05.June 4: Additional office equipment costing
$700 was purchased on credit from Discount Computer Corporation.06.June 8: Unsatisfactory
office equipment costing $140 was returned to Discount Computer for credit to be applied
against the outstanding balance owed by Byte.07.June 10: Byte paid $22,250 on the balance it
owed on the June 2 purchase of computer equipment.08.June 14: A one-year insurance policy
covering its computer equipment was purchased by Byte for $6,144 in cash. The effective date
of the policy was June 16.09.June 16: A check in the amount of $8,000 was received for
consulting revenue.10.June 16: Byte purchased a building and the land it is on for $101,000, to
house its repair facilities and to store computer equipment. The lot on which the building is
located is valued at $16,000. The balance of the cost is to be allocated to the building. Byte
made a cash down payment of $10,100 and executed a mortgage for the balance. The mortgage
is payable in eight equal annual installments beginning July 1.11.June 17: Cash of $6,800 was
paid for rent for June, July, August and September. Put the total amount into the Prepaid Rent
account.12.June 17: Received a bill of $450 from the local newspaper for advertising.13.June
21: Accounts payable in the amount of $560 were paid.14.June 21: A fax machine for the office
was purchased for $775 cash.15.June 21: Billed various miscellaneous local customers $4,800
for consulting services performed.16.June 22: Paid salaries of $1,010 to equipment operators for
the week ending June 18.17.June 22: Received a bill for $1,215 from Computer Parts and Repair
Co. for repairs to the computer equipment.18.June 22: Paid the advertising bill that was
received on June 17.19.June 23: Purchased office supplies for $505 on credit. Record the
purchase as an increase to the assets.20.June 23: Cash in the amount of $3,845 was received on
billings.21.June 28: Billed $5,385 to miscellaneous customers for services performed to June
25.22.June 29: Paid the bill received on June 22, from Computer Parts and Repairs Co.23.June
29: Cash in the amount of $5,101 was received for billings.24.June 29: Paid salaries of $1,010 to
equipment operators for the week ending June 25.25.June 30: Received a bill for the amount of

2. $990 from O & G Oil and Gas Co.26.June 30: Paid a cash dividend of $0.16 per share to the
three shareholders of Byte. [IMPORTANT NOTE: The number of shares of capital stock
outstanding can be determined from the first three transactions.]Adjusting Entries - Round to
two decimal places.27.The rent payment made on June 17 was for June, July, August and
September. Expense the amount associated with one month's rent.28.A physical inventory
showed that only $202.00 worth of office supplies remained on hand as of June 30.29.The
annual interest rate on the mortgage payable was 7.50 percent. Interest expense for one-half
month should be computed because the building and land were purchased and the liability
incurred on June 16.30.Information relating to the prepaid insurance may be obtained from the
transaction recorded on June 14. Expense the amount associated with one half month's
insurance.31.A review of Byte’s job worksheets show that there are unbilled revenues in the
amount of $5,500 for the period of June 28-30.32.The fixed assets have estimated useful lives
as follows:Building - 31.5 yearsComputer Equipment - 5.0 yearsOffice Equipment - 7.0
yearsUse the straight-line method of depreciation. Management has decided that assets
purchased during a month are treated as if purchased on the first day of the month. The
building’s scrap value is $7,500. The office equipment has a scrap value of $400. The computer
equipment has no scrap value. Calculate the depreciation for one month.33.A review of the
payroll records show that unpaid salaries in the amount of $606.00 are owed by Byte for three
days, June 28 - 30.34.The note payable relating to the June 2, and 10 transactions is a five-year
note, with interest at the rate of 12 percent annually. Interest expense should be computed based
on a 360 day year.[IMPORTANT NOTE: The original note on the computer equipment
purchased on June 2 was $116,000. On June 10, eight days later, $22,250 was repaid. Interest
expense must becalculated on the $116,000 for eight days. In addition, interest expense on the
$93,750 balance of the loan ($116,000 less $22,250 = $93,750) must be calculated for the 20
days remaining in the month of June.]35.Income taxes are to be computed at the rate of 25
percent of net income before taxes.[IMPORTANT NOTE: Since the income taxes are a percent
of the net income you will want to prepare the Income Statements through the Net Income
Before Tax line. The worksheet contains all of the accounts and their balances which you can
then transfer to the appropriate financial statement.]Closing Entries36.Close the revenue
accounts.37.Close the expense accounts.38.Close the income summary account.39.Close the
dividends account.
Solution
Jouranl entries
To dividendJune 27Rent expense$1700To prepaid rent$1700June 28Supplies

3. expense$303Supplies (505- 202)$303June 29Interest expense$852T o interest payable(90,900
@7.5%*1.5/12)$852June 30Insurance$256To prepaid insurance$25631A/c recievable$5500To
sales revenue$550032Building dep (90,900-7500/31.5 = $2648/12)$220Computer 41040+15660
+195,000/ 5= 50340/12$4195Office equipment 1026+700 -140 /7 = 227/12$18To Accumulated
depreciation$443333Salary expense$606To Salary payble$60634interest
expense(116,000@12%*8/360+116,000@12%*20/360$934to interest payable$93435Income
tax$To income tax payable$$