On June 1, a sole proprietorship was formed to sell and service personal computers. During the first six months, the following transactions occurred:
1. On June 1, invested $50,000 in the business.
2. On July 1, purchased a four-wheel-drive pickup truck for $22,000 (on account) that will be used in the business.
3. On September 1, paid fuel and repairs costs of $1,750 for the truck.
4. On December 31, the truck proves to be a “lemon” and it is sold to a used car dealer for $1,000.
Required
a. Prepare the journal entries to record these transactions.
b. Prepare any necessary adjusting entries for the company’s December 31 year-end (such as depreciation expense).
c. Post the journal entries and accruals to T-accounts.
d. Prepare a trial balance.
e. Prepare a balance sheet for the December 31 year-end.