[rosa21]

Abramson Financial Services was formed on May 1, 2011. The following events and transactions are from its first month:

May 1 Jacob Abramson invested $40,000 cash and office equipment worth $10,000 in the company.
1 Hired one employee to work in the office for a salary of $2,475 per month.
2 Paid $3,300 cash for a one-year insurance policy.
5 Signed a two-year rental agreement on an office and paid $4,800 cash. Half was for the May 2011 rent and the other half was for the final month’s rent. (Hint: The portion for the final month is considered prepaid rent.)
8 Purchased additional office equipment costing $17,000. A cash payment of $7,000 was made immediately. Signed a note payable for the balance.
9 Purchased office supplies for $500 cash.
15 Purchased more office supplies for $750 on account.
17 Completed a contract for a client for $3,000 on account.
22 Paid $250 for May’s telephone bill.
25 Completed services for a client and immediately collected $1,100.
26 Paid Jacob Abramson $1,600 cash for his personal use.
28 Collected $2,500 from the client billed on May 17.
30 Paid for the office supplies purchased on account on May 15.
30 Paid $50 interest expense on the note payable.
31 Received a cash advance of $500 for services to be completed in June.
31 Paid the employee’s monthly salary, $2,475.

[pready]

May 1 Debit Cash and Office Equipment for their amount and Credit the difference to the owners capital account.

May 1 no entry required.

May 5 Debit Prepaid rent for half of the payment and Rent Expense for the other half of the payment, Credit Cash for the total payment.

May 8 Debit Office Equipment for the total amount, Credit Cash for the amount paid and Credit Notes Payable for the difference

The rest are pretty straightforward.