Assignment #1
Kara Morris founded her dream business, called Kara's Kiteboarding Adventures. The following transactions occurred during June 2022, her first month of operations.
a) Kara invested $20,000 cash into the business on June 1.
b) Kara took out a loan of $6,000 from the bank on June 3.
c) Kara's Kiteboarding purchased $13,000 worth of kiteboarding equipment on credit on June 8.
d) The business rented additional kiteboarding equipment for $2,000 on account on June 1.
e) Kara's Kiteboarding paid cash $375 to cover insurance for the month of June on June 1.
f) The business provided lessons to a group of clients for $4,000 on account on June 16. (i.e. the customers did not pay cash for the lessons yet)
g) The business collected $1,200 from its credit customers on June 19.
h) The kiteboarding equipment purchased on credit (from transaction c) above) was paid back to the supplier in cash on June 23.
i) Kara paid back $2,300 of the bank loan back to the bank on June 29.
Required:
1. Open the following T-accounts and record the transactions above: Cash; Accounts Receivable; Equipment; Accounts Payable; Kara Morris, Capital; Teaching Revenue; Insurance Expense; Equipment Rental Expense. (Tab labeled "1.")
2. Post the June entries directly into the General Ledger (Tab labeled "2.").
3. Prepare Trial Balance (Tab labeled "3.")
4. Prepare the Income Statement, Statement of Changes in Equity, and Balance Sheet (Tab labeled "4.")
