| Iowa Service Company was formed on January 1, 2016 and the following transactions occurred in 2016: |
| 1. Acquired $60,000 cash from the issuance of common stock. |
| 2. Purchased $1,200 of supplies on account (that is, purchased supplies on credit). |
| 3.Paid $800 cash towards the accounts payable in transaction 2. |
| 4. Recognized revenue on account (that is, made sales on credit) of $42,000. |
| 5. Paid $21,000 for other operating expenses. |
| 6. Collected $38,000 cash from accounts receivable. |
| Adjusting entries in 2016 |
| 7. Recognized accrued salaries of $3,200 as of December 31, 2016. |
| 8. Had $200 of supplies on hand as of December 31, 2016. |
| Transactions in 2017 |
| 1. Paid $3,200 cash to settle the salaries payable obligation. |
| 2. Paid $3,600 cash in advance to lease office space. |
| 3. Purchased $1,000 of supplies on account (that is, on credit). |
| 4. Provided services on account (that is, on credit) of $32,000. |
| 5. Collected $33,000 cash from accounts receivable. |
| 6. Paid a cash dividend of $5,000 to the shareholders. |
| 7. Paid other operating expenses of $19,500. |
| Adjusting entries in 2017 |
| 8. The advanced payment for rental of the office space was made on March 1 for a 12-month term (Event 2). |
| 9. Had $300 of supplies on hand as of December 31, 2017. |
| Record each transaction and adjusting entries for the two years in a horizontal statements model using the following Excel template: |
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ACCT2010Chapter2Templates2015-3-1.xlsx
