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Ken Mazanec obtained a corporate charter form the state of Pennsylvania and started a cable television service. During the first month of operations Mazanec completed the following selected transactions:

1. Mazanec began the business with an investment of $30,000 cash and a building valued at $50,000. The corporation issued common stock to Mazanec.
2. Borrowed $25,000 from the bank, signed a note payable.
3. Paid $32,000 for transmitting equipment.
4. Purchased office supplies on account, $400.
5. Paid employee salary, $1,300.
6. Received $500 for cable TV service performed for customers.
7. Sold cable service to customers on account, $2,300.
8. Paid $100 of the account payable created in d.
9. Received a $600 bill for utility expense that will be paid in the near future.
10. Received cash on account, $1,100.
11. Paid the following cash expense:
    1. Rent on land, $1,000
    2. Advertising, $800.
12. Declared and paid dividends of $2,600.

REQUIRED

1. Identify the each record as a cash, credit or mixed transaction
2. Record the above transactions in the General Journal of M/s. Khalid Traders
3. Prepare Ledger and Trial Balance.

Q No 2: Herrold Consulting incorporated on February 1, 2011. The company engaged in the following transactions during its first month of operations:

Feb. 1 Issued capital stock in exchange for $750,000 cash.

Feb. 5 Borrowed $50,000 from the bank by issuing a note payable.

Feb. 8 Purchased land, building, and office equipment for $600,000. The value of the land was $100,000, the value of the building was $450,000, and the value of the office equipment was $50,000. The company paid $300,000 cash and issued a note payable for the balance.

Feb. 11 Purchased office supplies for $600 on account. The supplies will last for several months.

Feb. 14 Paid the local newspaper $400 for a full-page advertisement. The ad will appear in print on February 18.

Feb. 20 Several of the inkjet printer cartridges that Herrold purchased on February 11 were defective. The cartridges were returned and the office supply store reduced Herrolds outstanding balance by $100.

Feb. 22 Performed consulting services for $6,000 cash.

Feb. 24 Billed clients $9,000.

Feb. 25 Paid salaries of $5,000.

Feb. 28 Paid the entire outstanding balance owed for office supplies purchased on February 11

Instructions

1. Prepare journal entries, including explanations, for the above transactions.
2. Post each entry to the appropriate ledger accounts
3. Prepare a trial balance dated May 31, 2011. Assume accounts with zero balances are not included in the trial balance.

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