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Practice Problem 2

Spring Garden Lawn Care, Incorporated entered into the following transactions during the month of April 20XX. Spring Garden Lawn Care, Incorporated has the following accounts: cash, accounts receivable, office supplies, prepaid rent, office building, accounts payable, unearned revenue, common stock, dividends, fees earned, and wages expense.

Transactions

1. On April 1, the company received $150,000 cash in exchange for issuing 30,000 shares of common stock. 
2. On April 2, the company rented an office space and paid two years' rent ($48,000) in advance.
3. On April 2, the company purchased an office building for $80,000 by paying $20,000 cash, with the balance to be paid April 16.
4. On April 3, the company purchased office supplies of $1,500 on credit. It will be paid within 30 days.
5. On April 3, the company received $4,000 in cash for services to be rendered in the future.
6. On April 8, the company received $16,000 for lawn care services that it provided to clients.
7. On April 14, the company paid $7,000 to its employees for wages.
8. On April 16, the company paid its debt of $60,000.
9. On April 28, the company sent an $11,300 bill to its client for lawn care services. The bill is due in May.
10. On April 28, the company paid $1,500 in dividends. 

The answers for this problem are on the next page of this lesson.

Instructions

1. Journalize each transaction.
2. Post the transactions to ledgers using T Accounts.
3. Prepare a trial balance as of April 30, 20XX.