ou will begin by recording the transactions for the first half of January. Select a General Journal sheet from your supplies and give it the page number GJ$1.$ Continue numbering the journal pages as you start each new page $($GJ$2,$ GJ$3,$ etc.$).$ All entries should be recorded in proper format with suitable explanations. As you continue with this case study in later chapters, you will be referring to this first journal page again, so keep it handy.

$($a$)$Begin now by recording these transactions in the General Journal:

$20$Jan$.2$ The owners started their new business by investing the assets shown here. Notice from the chart of accounts that each owner has his own Capital account. $($You will record two compound entries for these investments, one for each owner.$)$

$$ Henri Martin: $$

$$ Cash $$22,000$

$$ Furniture & Equipment $8,000$

$$ $$30,000$

$$ Wes Corbett: $$

$$ Cash $$15,000$

$$ Vehicle $($used van$)15,000$

$$ $$30,000$

$2$ Issued Cheque #$1$ for the January rent, $$2,500.$

$2$ Issued Cheque #$2$ for advertising in the newspaper, $$610\mathrm{.}20.($Debit Advertising Expense.$)$

$4$ Bought office supplies, $$305\mathrm{.}10.$ Issued Cheque #$3.($Debit Office Supplies Expense.$)$

$4$ Issued Cheque #$4$ for the installation of our new phone line, $$165.($Telephone Expense$).$

$5$ Bought merchandise as follows: paint and supplies, $$10,000$; wallpaper, $$5,000.$ Issued Cheque #$5.($Notice on the chart of accounts that there are separate Purchases accounts for these goods. Record this as a compound entry.$)$

$9$ Bought a paint mixer and colour dispenser from Rainbow Supplies Co$.,$ $$1,620.$ Issued Cheque #$6.($Tools & Equipment$).$

$10$ Cash sales: paint and supplies, $$3,000$; wallpaper, $$1,000.($Notice that there are separate Sales accounts for these goods.$)$

$15$ Cash sales: paint and supplies, $$6,000$; wallpaper, $$2,000.$

$($b$)$Post the journal entries to the ledger accounts. $($All ledger accounts for KBC Decorating Co$.$ should be kept separate from your Practice Exercise material and should be neatly arranged in a binder or file so you can access them easily. Do not change the order of the ledger pages.$)$

$($c$)$After completing the posting, prepare a trial balance on January $15.$ If you are using the working papers available with this textbook, prepare your trial balance on Form TB$-$KBC$.$ If your trial balance does not balance on the first attempt, use the steps for locating errors as described in this chapter.