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Grindstone Paving provides residential and commercial paving services. Its balance sheet at the end of June 2018 is shown below, along with its chart of accounts.

	Grindstone Paving Balance Sheet As at June 30, 2018
Assets		Liabilities
Cash	$7,580	Accounts Payable $15,800
Accounts Receivable	6,000	Unearned Revenue 6,200
Prepaid Insurance	1,800	Notes Payable 22,000
Equipment	55,000	Total Liabilities 44,000
		Owner's Equity
		Stone, Capital 26,380
Total Assets	$70,380	Total Liabilities and Owner's Equity $70,380

Account Description

Account #

Account Description

Account #

ASSETS Cash 101 Accounts Receivable 105 Prepaid Insurance 110 Equipment 120 Accumulated Depreciation-Equipment 125

LIABILITIES Accounts Payable 200 Interest Payable 205 Salary Payable 210 Unearned Revenue 215 Notes Payable 220

REVENUE

Service Revenue 400

EXPENSES Advertising Expense 500 Depreciation Expense 510 Insurance Expense 515 Interest Expense 520 Salaries Expense 545 Telephone Expense 550

OWNER'S EQUITY

Stone, Withdrawals 310

Income Summary 315

Stone, Capital 300

For the month of July 2018, Grindstone Paving had the following transactions.

Jul 1 The owner invested $8,000 cash into the business

Jul 2 Received $2,530 cash for work that will be provided in August

Jul 5 Received an advertising bill for $600, which will be paid next month

Jul 8 Paid the $350 telephone bill with cash

Jul 10 Provided $4,680 worth of services to customers who will pay later

Jul 14 Purchased equipment with $8,200 cash

Jul 20 Received $2,350 in payment from customers paying their accounts

Jul 22 Paid $1,970 toward accounts payable

Jul 24 Paid $1,300 toward principal of the note payable

Jul 28 Paid salary of $2,400 to an employee

Jul 30 The owner withdrew $2,200 cash for personal use

At the end of July, the following adjustments had to be journalized to properly report the balances of the companys accounts.

Jul 31 One month of prepaid insurance worth $100 has been used

Jul 31 Monthly depreciation on the equipment was $450

Jul 31 Unearned revenue worth $620 has now been earned

Jul 31 Interest of $75 has accrued on the of the note payable

Jul 31 Accrued salary expense of $500 for an employee

Note: Of the remaining balance of the note payable, $5,000 will be paid within the next year. Required

g) Prepare the journal entries for the adjustments and post them to the appropriate general ledger accounts.

h) Prepare the journal entries to close the books for the months of July 2018 (use the income summary account), and post the journal entries to the appropriate general ledger accounts, which start on the next page.

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