Essay About Rawls Repair Corporation And First Month Of Operation

F104 Case Study 1
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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 months 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
Description(Account Name)
Debit
Credit
Oct. 1
12000
Assets
Oct. 1
Common Stock
12000
Oct. 1
Insurance Expense
Prepaid Insurance