St. Thomas Yacht Services, Inc. had the following transactions during its first month of operations:

Dec 2	Borrowed $55,000 from First Bank after signing a 10 year, 4% promissory note.  Payments are due on the last day of the month.
Dec 4	Journalized the issuance of $65,000 of $1 par value common stock at par.
Dec 7	Signed lease and paid the landlord $1,000 rent for the first month.
Dec 8	Purchased $18,000 of office furniture on account.
Dec 9	Created marketing materials, including a logo.
Dec 12	Purchased a one year insurance policy for $2,700.
Dec 15	Purchased $1,500 of cleaning supplies on account.
Dec 17	Hired 6 employees, who will be paid $9 per hour.
Dec 18	Paid $325 to have marketing materials printed.
Dec 22	Three employees were sent to distribute marketing materials along Pier 8.
Dec 23	Detailed 8 sailboats competing in the Maxi Yacht Rolex Cup this March. The bookkeeper sent an invoice for $12,000.
Dec 25	Received $3,000 in deposits to clean two 63 foot yachts.
Dec 26	Sent two employees to clean Serendipity, a 56 foot sloop. They spent 3 hours on the job.
Dec 29	Paid $54 to employees who cleaned Serendipity and $81 to employees who distributed marketing materials. (Ignore payroll taxes for this problem).
Dec 30	Sent a $1,800 invoice to Serendipity's Captain Samantha, less the $700 deposit.
Dec 31	Paid First Bank $557 representing $183 in interest plus $374 toward the principal.

 

On December 31, the following adjustments must be made:

• The furniture, which has no salvage value and a 5 year useful life, needs to be depreciated using straight-line depreciation. 
• A physical count shows only $950  of supplies remains in the storage closet.
• One month of the 1-year insurance policy has been used.
• The Board of Directors did not declare dividends in January.

The closing entries were

Journal

Date	Description	Debit	Credit
Dec 31	Service Revenue	13,800
Dec 31	Income Summary		13,800
	Income Summary	6,018
	Advertising Expense		325
	Depreciation Expense - Furniture		3,600
	Insurance Expense		225
	Interest Expense		183
	Rent Expense		1,000
	Supplies Expense		550
	Wages Expense		135
	Income Summary	7,782
	Retained Earnings		7,782

 

Post the closing entries to the ledger

Service Revenue

Debit	Credit

Advertising Expense

Debit	Credit

Depreciation Expense - Furniture

Debit	Credit

Insurance Expense

Debit	Credit

Interest Expense

Debit	Credit

Rent Expense

Debit	Credit

Supplies Expense

Debit	Credit

Wages Expense

Debit	Credit

Income Summary

Debit	Credit

Retained Earnings

Debit	Credit