2024 – Humble Management Services opens for business and completes these transactions in September Sept 1 Henry Humble the

Problem 2-1B – 2024


Humble Management Services opens for business and completes these transactions in September.




Henry   Humble, the owner, invests $38,000 cash along with office equipment valued at   $15,000 in the company in exchange for common stock.



The   company prepaid $9,000 cash for 12 months’ rent for office space. (Hint: Debit   Prepaid Rent for $9,000.)



The   company made credit purchases for $8,000 in office equipment and $2,400 in   office supplies. Payment is due within 10 days.



The   company completed work for a client and immediately received $3,280 cash.



The   company completed a $15,400 project for a client, who must pay within 30   days.



The   company paid $10,400 cash to settle the payable created on September 4.



The   company paid $1,900 cash for the premium on an 18-month insurance policy. (Hint: Debit   Prepaid Insurance for $1,900.)



The   company received $7,700 cash as partial payment for the work completed on   September 12.



The   company completed work for another client for $2,100 on credit.



The   company paid $5,300 cash in dividends.



The   company purchased $550 of additional office supplies on credit.



The   company paid $860 cash for this month’s utility bill.


1. Prepare general journal entries to record these transactions (use account titles listed in part 2).

2. Open the following ledger accounts—their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable (201); Common Stock (307); Dividends (319); Services Revenue (401); and Utilities Expense (690). Post journal entries from part 1 to the ledger accounts and enter the balance after each posting.

3. Prepare a trial balance as of the end of September.

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