Tonys Rentals:

On September 1, 20__, Anthony Ferrara organized a business called Tonys Rentals for the purpose of operating an equipment rental yard. The new business was able to begin operations immediately by purchasing the assets and taking over the location of Rent-It, an equipment rental company that was going out of business. Tonys Rental uses the following chart of accounts: Cash Account Receivable Prepaid Rent Unexpired Insurance Office Supplies Rental Equipment Accumulated Dep. R. Equip. Notes Payable Account Payable Interest Payable Salaries Payable Unearned Rental Fee 1 4 6 7 8 10 12 20 22 25 26 29 Anthony Ferrara, Capital Anthony Ferrara, Drawing Income Summary Rental Fees Earned Salaries Expense Maintenance Expense Utilities Expense Rent Expense Office Supplies Expense Depreciation Expense R. Equip. Interest Expense 30 35 40 50 60 61 62 63 64 65 66

Answer: Tonys Rental General Journal For the month of September 20__
DATE PARTICULARS P/R DEBIT $ 100,000 100,000 CREDIT $

Sept. 1

Cash 1 Anthony Ferrara, Capital 30 Received cash in business Tonys Rental Prepaid Rent Cash Paid 3 months advance rent Rental Equipment Cash Notes Payable Paid for Equipment in Cash & Notes Payable @ 9% per annum Office Supplies Accounts Payable Purchase office supplies on account 6 1

Sept. 1

9,000 9,000

Sept. 1

10 1 20

180,000 70,000 110,000

Sept. 4

8 22

1,630 1,630

DATE

PARTICULARS

P/R

DEBIT $ 10,000

CREDIT $

Sept. 8

Cash Unearned Rental Fee Received advance rent on rental yard Salaries Expense Cash Paid salaries for first two week Cash Account Receivable Rental Fee Earned Rental fee earned in cash & on account Maintenance Expense Accounts Payable Purchase part for repairing on account Cash Account Receivable Received cash on account of rental fee No Entry Rented a backhoe @ $100 per day, but when he return after two or three week Salaries Expense Cash Paid biweekly salaries Account Payable Cash Paid to Earth Movers Inc. Anthony Ferrara, Drawing Cash Anthony withdrawal for personal use No Entry Co-defendant $25,000 lawsuit filed on behalf of Kevin Davenport Unexpired Insurance Cash Purchase 12 months insurance policy

1 29

10,000

Sept. 12

60 1

3,600 3,600

Sept. 15

1 4 50

5,300 800 6,100

Sept. 17

61 22

340 340

Sept. 23

1 4

210 210

Sept. 25

Sept. 26

60 1

3,600 3,600

Sept. 27

22 1

340 340

Sept. 28

35 1

2,000 2,000

Sept. 29

Sept. 29

7 1

2,700 2,700

DATE

PARTICULARS

P/R

DEBIT $ 270

CREDIT $

Sept. 30

Utilities Expense Account Payable Received utility bill m/o September Cash Rental Fee Earned Received cash of rental fee second half

62 22

270

Sept. 30

1 50

8,450 8,450

Tonys Rental General Ledger For the month of September 20__

Cash DATE Sept. 1 Sept. 8 Sept. 15 Sept. 23 Sept. 30 PARTICULAR Anthony Ferrara, Capital Unearned Rental Fee Rental Fee Earned Account Receivable Rental Fee Earned P/R 30 29 50 4 50 DEBIT $ 100,000 10,000 5,300 210 8,450 DATE Sept. 1 Sept. 1 Sept. 12 Sept. 26 Sept. 27 Sept. 28 Sept. 29 PARTICULAR Prepaid Rent Rental Equipment Salaries Expense Salaries Expense Account Payable Anthony Ferrara, Drawing Unexpired Insurance P/R 6 10 60 60 22 35 7 1 CREDIT $ 9,000 70,000 3,600 3,600 340 2,000 2,700

Sept. 30 123,960 Oct. 1 Balance b/f 32,720

Balance c/f

32,720 123,960

Account Receivable DATE Sept. 15 PARTICULAR Rental Fee Earned P/R 50 DEBIT $ 800 DATE Sept. 23 PARTICULAR Cash P/R 1

4 CREDIT $ 210

Sept. 30 800 Oct. 1 Balance b/f 590

Balance c/f

590 800

Prepaid Rent DATE Sept. 1 PARTICULAR Cash P/R 1 DEBIT $ 9,000 DATE PARTICULAR P/R

6 CREDIT $

Sept. 30 9,000 Oct. 1 Balance b/f 9,000 Unexpired Insurance DATE Sept. 29 PARTICULAR Cash P/R 1 DEBIT $ 2,700 DATE

Balance c/f

9,000 9,000

7 PARTICULAR P/R CREDIT $

Sept. 30 2,700 Oct. 1 Balance b/f 2,700 Office Supplies DATE Sept. 4 PARTICULAR Accounts Payable P/R 22 DEBIT $ 1,630 DATE

Balance c/f

2,700 2,700

8 PARTICULAR P/R CREDIT $

Sept. 30 1,630 Oct. 1 Balance b/f 1,630 Rental Equipment DATE Sept. 1 PARTICULAR Cash & Notes Payable P/R 1& 20 DEBIT $ 180,000 DATE

Balance c/f

1,630 1,630

10 PARTICULAR P/R CREDIT $

Sept. 30 180,000 Oct. 1 Balance b/f 180,000 Notes Payable DATE PARTICULAR P/R DEBIT $ DATE Sept. 1

Balance c/f

180,000 180,000

20 PARTICULAR Rental Equipment P/R 10 CREDIT $ 110,000

Sept. 30

Balance c/f

110,000 110,000 Oct. 1 Balance b/f

110,000 110,000

Account Payable DATE Sept. 27 PARTICULAR Cash P/R 1 DEBIT $ 340 DATE Sept. 4 Sept. 17 Sept. 30 PARTICULAR Office Supplies Maintenance Expense Utilities Expense P/R 8 61 62

22 CREDIT $ 1,630 340 270

Sept. 30

Balance c/f

1,900 2,240 Oct. 1 Balance b/f

2,240 1,900

Unearned Rental Fee DATE PARTICULAR P/R DEBIT $ DATE Sept. 8 PARTICULAR Cash P/R 1

29 CREDIT $ 10,000

Sept. 30

Balance c/f

10,000 10,000 Oct. 1 Balance b/f

10,000 10,000

Anthony Ferrara, Capital DATE PARTICULAR P/R DEBIT $ DATE Sept. 1 PARTICULAR Cash P/R 1

30 CREDIT $ 100,000

Sept. 30

Balance c/f

100,000 100,000 Oct. 1 Balance b/f

100,000 100,000

Anthony Ferrara, Drawing DATE Sept. 28 PARTICULAR Cash P/R 1 DEBIT $ 2,000 DATE PARTICULAR P/R

35 CREDIT $

Sept. 30 2,000 Oct. 1 Balance b/f 2,000

Balance c/f

2,000 2,000

Rental Fees Earned DATE PARTICULAR P/R DEBIT $ DATE Sept. 15 Sept. 30 PARTICULAR Cash & Account Receivable Cash P/R 1&4 1

50 CREDIT $ 6,100 8,450

Sept. 30

Balance c/f

14,550 14,550 Oct. 1 Balance b/f

14,550 14,550

Salaries Expense DATE Sept. 12 Sept. 26 PARTICULAR Cash Cash P/R 1 1 DEBIT $ 3,600 3,600 DATE PARTICULAR P/R

60 CREDIT $

Sept. 30 7,200 Oct. 1 Balance b/f 7,200

Balance c/f

7,200 7,200

Maintenance Expense DATE Sept. 17 PARTICULAR Accounts Payable P/R 22 DEBIT $ 340 DATE PARTICULAR P/R

61 CREDIT $

Sept. 30 340 Oct. 1 Balance b/f 340

Balance c/f

340 340

Utilities Expense DATE Sept. 30 PARTICULAR Account Payable P/R 22 DEBIT $ 270 DATE PARTICULAR P/R

62 CREDIT $

Sept. 30 270 Oct. 1 Balance b/f 270

Balance c/f

270 270

Tonys Rental Trail Balance For the month of September 20__

S.NO. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 COA 1 4 6 7 8 10 20 22 29 30 35 50 60 61 62 ACCOUNT NAME Cash Account Receivable Prepaid Rent Unexpired Insurance Office Supplies Rental Equipment Notes Payable Account Payable Unearned Rental Fee Anthony Ferrara, Capital Anthony Ferrara, Drawing Rental Fees Earned Salaries Expense Maintenance Expense Utilities Expense TOTAL DEBIT $ 32,720 590 9,000 2,700 1,630 180,000 110,000 1,900 10,000 100,000 2,000 14,550 7,200 340 270 236,450 236,450 CREDIT $

Tonys Rental Adjusted General Journal For the month of September 20__
DATE PARTICULARS P/R DEBIT $ 3,000 3,000 CREDIT $

Sept. 30

Rent Expense Prepaid Rent To record rent expense m/o Sept. Interest Expense Interest Payable To record Interest @ 9% per annum Depreciation Expense R. Equip. Accumulated Dep. R. Equip. To record depreciation m/o Sept. Office Supplies Expense Office Supplies To record depreciation m/o Sept.

63 6

Sept. 30

66 25

825 825

Sept. 30

65 12

1,500 1,500

Sept. 30

64 8

530 530

DATE

PARTICULARS

P/R

DEBIT $ 4,840

CREDIT $

Sept. 30

Unearned Rental Fee Rental Fees Earned To record rental fee in advance Account Receivable Rental Fees Earned To record 5 days rent earned Mission Salaries Expense Salaries Payable To record salaries expense last payroll

29 50

4,840

Sept. 30

4 50

500 500

Sept. 30

60 26

900 900

Tonys Rental Adjusted General Ledger For the month of September 20__

Account Receivable DATE Sept. 30 Sept. 30 PARTICULAR Balance c/f Rental Fees Earned 50 P/R DEBIT $ 590 500 DATE PARTICULAR P/R

4 CREDIT $

Sept. 30 1,090 Oct. 1 Balance b/f 1,090

Balance c/f

1,090 1,090

Prepaid Rent DATE Sept. 30 PARTICULAR Balance c/f P/R DEBIT $ 9,000 DATE Sept. 30 PARTICULAR Rent Expense P/R 63

6 CREDIT $ 3,000

Sept. 30 9,000 Oct. 1 Balance b/f 6,000

Balance c/f

6,000 9,000

Office Supplies DATE Sept. 30 PARTICULAR Balance c/f P/R DEBIT $ 1,630 DATE Sept. 30 PARTICULAR Office Supplies Expense P/R 64

8 CREDIT $ 530

Sept. 30 1,630 Oct. 1 Balance b/f 1,100

Balance c/f

1,100 1,630

Accumulated Dep. R. Equip. DATE PARTICULAR P/R DEBIT $ DATE PARTICULAR Depreciation Expense R. Equip. P/R

12 CREDIT $

Sept. 30

65

1,500

Sept. 30

Balance c/f

1,500 1,500 Oct. 1 Balance b/f

1,500 1,500

Interest Payable DATE PARTICULAR P/R DEBIT $ DATE Sept. 30 PARTICULAR Interest Expense P/R 66

25 CREDIT $ 825

Sept. 30

Balance c/f

825 825 Oct. 1 Balance b/f

825 825

Salaries Payable DATE PARTICULAR P/R DEBIT $ DATE Sept. 30 PARTICULAR Salaries Expense P/R 60

26 CREDIT $ 900

Sept. 30

Balance c/f

900 900 Oct. 1 Balance b/f

900 900

Unearned Rental Fee DATE Sept. 30 PARTICULAR Rental Fees Earned P/R 50 DEBIT $ 4,840 DATE Sept. 30 PARTICULAR Balance b/f P/R

29 CREDIT $ 10,000

Sept. 30

Balance c/f

5,160 10,000 Oct. 1 Balance b/f

10,000 5,160

Rental Fees Earned DATE PARTICULAR P/R DEBIT $ DATE Sept. 30 Sept. 30 Sept. 30 PARTICULAR Balance b/f Unearned Rental Fee Account Receivable 29 4 P/R

50 CREDIT $ 14,550 4,840 500

Sept. 30

Balance c/f

19,890 19,890 Oct. 1 Balance b/f

19,890 19,890

Salaries Expense DATE Sept. 30 Sept. 30 PARTICULAR Balance c/f Salaries Payable 26 P/R DEBIT $ 7,200 900 DATE PARTICULAR P/R

60 CREDIT $

Sept. 30 8,100 Oct. 1 Balance b/f 8,100

Balance c/f

8,100 8,100

Rent Expense DATE Sept. 30 PARTICULAR Prepaid Rent P/R 6 DEBIT $ 3,000 DATE PARTICULAR P/R

63 CREDIT $

Sept. 30 3,000 Oct. 1 Balance b/f 3,000

Balance c/f

3,000 3,000

Office Supplies Expense DATE Sept. 30 PARTICULAR Office Supplies P/R 8 DEBIT $ 530 DATE PARTICULAR P/R

64 CREDIT $

Sept. 30 530 Oct. 1 Balance b/f 530

Balance c/f

530 530

Depreciation Expense R. Equip. DATE Sept. 30 PARTICULAR Accumulated Dep. R. Equip. P/R 12 DEBIT $ 1,500 DATE PARTICULAR P/R

65 CREDIT $

Sept. 30 1,500 Oct. 1 Balance b/f 1,500

Balance c/f

1,500 1,500

Interest Expense DATE Sept. 30 PARTICULAR Interest Payable P/R 25 DEBIT $ 825 DATE PARTICULAR P/R

66 CREDIT $

Sept. 30 825 Oct. 1 Balance b/f 825

Balance c/f

825 825

Tonys Rental Adjusted Trail Balance For the month of September 20__
S.NO. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 COA 1 4 6 7 8 10 12 20 22 25 26 29 30 35 40 50 60 61 62 63 64 65 66 ACCOUNT NAME Cash Account Receivable Prepaid Rent Unexpired Insurance Office Supplies Rental Equipment Accumulated Dep. R. Equip. Notes Payable Account Payable Interest Payable Salaries Payable Unearned Rental Fee Anthony Ferrara, Capital Anthony Ferrara, Drawing Income Summary Rental Fees Earned Salaries Expense Maintenance Expense Utilities Expense Rent Expense Office Supplies Expense Depreciation Expense R. Equip. Interest Expense TOTAL DEBIT $ 32,720 1,090 6,000 2,700 1,100 180,000 1,500 110,000 1,900 825 900 5,160 100,000 2,000 19,890 8,100 340 270 3,000 530 1,500 825 240,175 240,175 CREDIT $

Tonys Rental Income Statement For the month of September 20__

Revenue: Rental Fees Earned Expenses: Salaries Expense Maintenance Expense Utilities Expense Rent Expense Office Supplies Expense Depreciation Expense R. Equip. Interest Expense Net Income

19,890

$ $ $ $ $ $ $

8,100 340 270 3,000 530 1,500 825

$ $

(14,565) 5,325

Tonys Rental Closing General Journal For the month of September 20__
DATE PARTICULARS P/R DEBIT $ 19,890 19,890 CREDIT $

Sept. 30

Rental Fees Earned Income Summary To closed revenue account m/o Sept. Income Summary Salaries Expense Maintenance Expense Utilities Expense Rent Expense Office Supplies Expense Depreciation Expense R. Equip. Interest Expense To closed expense account m/o Sept. Income Summary Anthony Ferrara, Capital To closed income summary account Anthony Ferrara, Capital Anthony Ferrara, Drawing To closed Anthony's, Drawing account

50 40

Sept. 30

40 60 61 62 63 64 65 66

14,565 8,100 340 270 3,000 530 1,500 825

Sept. 30

40 30

5,325 5,325

Sept. 30

30 35

2,000 2,000

Tonys Rental Closing General Ledger For the month of September 20__
Rental Fees Earned DATE Sept. 30 PARTICULAR Income Summary P/R 40 DEBIT $ 19,890 DATE Sept. 30 PARTICULAR Balance b/f P/R 50 CREDIT $ 19,890

19,890 Oct. 1 Balance b/f

19,890 -

Salaries Expense DATE Sept. 30 PARTICULAR Balance b/f P/R DEBIT $ 8,100 DATE Sept. 30 PARTICULAR Income Summary P/R 40

60 CREDIT $ 8,100

8,100 Oct. 1 Balance b/f

8,100 -

Maintenance Expense DATE Sept. 30 PARTICULAR Balance b/f P/R DEBIT $ 340 DATE Sept. 30 PARTICULAR Income Summary P/R 40

61 CREDIT $ 340

340 Oct. 1 Balance b/f

340 -

Utilities Expense DATE Sept. 30 PARTICULAR Balance b/f P/R DEBIT $ 270 DATE Sept. 30 PARTICULAR Income Summary P/R 40

62 CREDIT $ 270

270 Oct. 1 Balance b/f

270 -

Rent Expense DATE Sept. 30 PARTICULAR Balance b/f P/R DEBIT $ 3,000 DATE Sept. 30 PARTICULAR Income Summary P/R 40

63 CREDIT $ 3,000

3,000 Oct. 1 Balance b/f

3,000 -

Office Supplies Expense DATE Sept. 30 PARTICULAR Balance b/f P/R DEBIT $ 530 DATE Sept. 30 PARTICULAR Income Summary P/R 40

64 CREDIT $ 530

530 Oct. 1 Balance b/f

530 -

Depreciation Expense R. Equip. DATE Sept. 30 PARTICULAR Balance b/f P/R DEBIT $ 1,500 DATE Sept. 30 PARTICULAR Income Summary P/R 40

65 CREDIT $ 1,500

1,500 Oct. 1 Interest Expense DATE Sept. 30 PARTICULAR Balance b/f P/R DEBIT $ 825 DATE Sept. 30 PARTICULAR Income Summary P/R 40 Balance b/f

1,500 66 CREDIT $ 825

825 Oct. 1 Income Summary DATE Sept. 30 Sept. 30 Sept. 30 Sept. 30 Sept. 30 Sept. 30 Sept. 30 Sept. 30 PARTICULAR Salaries Expense Maintenance Expense Utilities Expense Rent Expense Office Supplies Expense Depreciation Expense R. Equip. Interest Expense Anthony Ferrara, Capital P/R 60 61 62 63 64 65 66 30 DEBIT $ 8,100 340 270 3,000 530 1,500 825 5,325 19,890 Oct. 1 Balance b/f DATE Sept. 30 PARTICULAR Rental Fees Earned P/R 50 Balance b/f

825 40 CREDIT $ 19,890

19,890 35 P/R 30 CREDIT $ 2,000

Anthony Ferrara, Drawing DATE Sept. 30 PARTICULAR Balance b/f P/R DEBIT $ 2,000 DATE Sept. 30 PARTICULAR Anthony Ferrara, Capital

2,000 Oct. 1 Balance b/f

2,000 -

Anthony Ferrara, Capital DATE Sept. 30 PARTICULAR Anthony Ferrara, Drawing P/R 35 DEBIT $ 2,000 DATE Sept. 30 Sept. 30 Sept. 30 Balance c/f 103,325 105,325 Oct. 1 Balance b/f PARTICULAR Balance b/f Income Summary 40 P/R

30 CREDIT $ 100,000 5,325

105,325 103,325

Tonys Rental Closing Trail Balance For the month of September 20__
S.NO. 1 2 3 4 5 6 7 8 9 10 11 12 13 COA 1 4 6 7 8 10 12 20 22 25 26 29 30 ACCOUNT NAME Cash Account Receivable Prepaid Rent Unexpired Insurance Office Supplies Rental Equipment Accumulated Dep. R. Equip. Notes Payable Account Payable Interest Payable Salaries Payable Unearned Rental Fee Anthony Ferrara, Capital TOTAL DEBIT $ 32,720 1,090 6,000 2,700 1,100 180,000 1,500 110,000 1,900 825 900 5,160 103,325 223,610 223,610 CREDIT $

Tonys Rental Balance Sheet As of September 20__

Assets 1 4 6 7 8 10 12 Cash Account Receivable Prepaid Rent Unexpired Insurance Office Supplies Rental Equipment Less: Accumulated Dep. R. Equip. $ $ $ $ $ $ $ 180,000 (1,500) $ $ 32,720 1,090 6,000 2,700 1,100 178,500 222,110

Liabilities & Owner's Equity 22 25 26 29 20 30 Account Payable Interest Payable Salaries Payable Unearned Rental Fee Notes Payable Anthony Ferrara, Capital $ $ $ $ $ $ $ 1,900 825 900 5,160 110,000 103,325 222,110