Question

Joe Jackson decides to go into the car repair business by opening Honest Joe’s Garage. The following events occurred during January 2017, the first month of operations:

a.	Joe contributed $15,000 from his savings to the business and took 3,000 shares of no par value common stock.
b.	The business paid $3,000 for a six-month insurance policy. Record as Prepaid Insurance.
c.	Paid $750 cash for the first month’s rent.
d.	Purchased shop equipment for $8,000 cash.
e.	Purchased shop supplies costing $3,000 on account.
f.	Purchased a used wrecker for $11,500 by paying $1,500 down and financing the balance on a three-year note.
g.	Received $1,750 from customers for repair work done.
h.	Joe invested another $5,000 into the business and took another 1,000 shares of stock.
i.	Paid $300 cash for radio advertising for the first month.
j.	Paid $200 cash for gas, oil, and service costs on the wrecker.
k.	Paid $3,000 on accounts payable.
l.	Repaired a truck for Ace Trucking for $1,200 on account.
m.	Paid $70 for the installation of the telephone.
n.	Paid $180 for repairs on the wrecker.
o.	Collected $1,000 cash and accepted a 60-day notes receivable of $1,450 from Speedy Trucking for repair services rendered.
p.	Paid $150 for cleaning and minor maintenance on the building.
q.	Received $1,500 cash from customers for repair services rendered.
r.	Purchased shop supplies for $2,500 cash.
s.	Purchased a computer for the office for $1,250 cash.
t.	Received payment of $1,200 from Ace Trucking.
u.	Paid the monthly utility bill, $900.
v.	Paid $350 for gas and oil for the wrecker.

Required:

Record the adjusting journal entry for insurance.

Make an adjusted trial balance.