Leonard Matson Completed These Transactions During December of the Current

question 187

Essay

Leonard Matson completed these transactions during December of the current year:
$\begin{array}{|l|r|l|}\hline\text { Dec } & 1 & \begin{array}{l}\text { Began a financial services practice by investing } \$ 15,000 \text { cash and office } \\\text { equipment having a } \$ 5,000 \text { value in exchange for common stock. }\end{array} \\\hline & 2 & \text { Purchased } \$ 1,200 \text { of office equipment on credit. } \\\hline & 3 & \text { Purchased } \$ 300 \text { of office supplies on credit. } \\\hline & 4 & \begin{array}{l}\text { Completed work for a client and immediately received a payment of } \\\$ 900 \text { cash. }\end{array}\\\hline & 8 & \text { Completed work for Acme Loan Co. on credit. \$1,700 } \\\hline & 10 & \text { Paid for the supplies purchased on December 3. } \\\hline &14 & \text { Paid for the annual \$960 premium on an insurance policy. } \\\hline &18& \begin{array}{l}\text { Received payment in full from Acme Loan Co. for the work completed } \\\text { on December } 8 .\end{array}\\\hline & 27 & \text { Paid a } \$ 650 \text { cash dividend. } \\\hline & 30 & \text { Paid } \$ 175 \text { cash for the December utility bills } \\\hline & 30 & \begin{array}{l}\text { Received } \$ 2,000 \text { from a client for financial services to be rendered next } \\\text { year. }\end{array}\\\hline\end{array}$
Prepare general journal entries to record these transactions.

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Definitions:

Temporary Accounts

Accounts that are cleared out at the end of each accounting period, including revenues, expenses, and dividends accounts.

Permanent Accounts

Balance sheet accounts that carry their ending balances into the next accounting period, including assets, liabilities, and equity accounts.

Closing Entry Process

The procedure at the end of an accounting period to prepare the accounts for the next period by clearing out revenues and expenses into the Retained Earnings account.