Green Wave Company plans to own and operate a storage rental facility. For the first month of operations, the company has the following transactions. 1. January 1 Issue 10,000 shares of common stock in exchange for $25,000 in cash.
2. January 5 Purchase land for $15,500. A note payable is signed for the full amount.
3. January 9 Purchase storage container equipment for $7,300 cash.
4. January 12 Hire three employees for $1,300 per month.
5. January 18 Receive cash of $11,300 in rental fees for the current month.
6. January 23 Purchase office supplies for $1,300 on account.
7. January 31 Pay employees $3,900 for the first month's salaries.

Required:
1. Record each transaction. Green Wave uses the following accounts: Cash, Supplies, Land, Equipment, Common Stock, Accounts Payable, Notes Payable, Service Revenue, and Salaries Expense.
2. Post each transaction to T-accounts and compute the ending balance of each account. Since this is the first month of operations, all T-accounts have a beginning balance of zero.
3. After calculating the ending balance of each account, prepare a trial balance.

Required 1.

January 1

Cash $25,000 (debit)

Common Stock $25,000 (credit)

January 5

Land $15,500 (debit)

Notes Payable $15,500 (credit)

January 9

Equipment  $7,300 (debit)

Cash  $7,300 (credit)

January 12

Salaries Expense $3,900 (debit)

Accounts Payable $3,900 (credit)

January 18

Cash $11,300 (debit)

Service Revenue $11,300 (credit)

January 23

Supplies $1,300 (debit)

Accounts Payable $1,300 (credit)

January 31

Accounts Payable $3,900 (debit)

Cash $3,900 (credit)

Required 2.

Cash = = $25,100

Common Stock = $25,000

Land = $15,500

Notes Payable  = $15,500

Equipment  = $7,300

Salaries Expense = $3,900

Accounts Payable  = $1,300

Service Revenue = $11,300

Supplies = $1,300

Required 3.

                                               Debit               Credit

Cash                                     $25,100

Common Stock                                           $25,000

Land                                     $15,500

Notes Payable                                             $15,500

Equipment                            $7,300

Salaries Expense                 $3,900

Accounts Payable                                         $1,300

Service Revenue                                          $11,300

Supplies                                $1,300

Totals                                  $53,100           $53,100

Explanation:

Calculation of Account Balances :

Cash = $25,000 - $7,300 + $11,300 - $3,900 = $25,100

Common Stock = $25,000

Land = $15,500

Notes Payable  = $15,500

Equipment  = $7,300

Salaries Expense = $3,900

Accounts Payable = $3,900 + $1,300 -  $3,900 = $1,300

Service Revenue = $11,300

Supplies = $1,300

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