Problem - Long-term assets and liabilities are denied recognition on funds statements. Entrepreneurs Consultants, a state agency, was established to provide consulting services to small businesses. It maintains only a single general fund and accounts for its activities on a modified accrual basis. During its first month of operations, the association engaged in, or was affected by, the following transactions and events:
a. It received an unrestricted grant of $100,000.
b. It purchased five computers at $2,000 each.
c. It paid wages and salaries of $6,000.
d. It borrowed $24,000 from a bank, to enable it to purchase an automobile.
e. It purchased the automobile for $24,000.
f. It made its first payment on the note- interest of $200.
g. It destroyed one of its computers in an accident. The computer was not insured.
1. Prepare journal entries in the general fund to record each of the transactions or other events.
2. Prepare a balance sheet and a statement of revenues, expenditures, and changes in fund balance for the general fund.