You’ve just secured a new client in your accounting practice, Howard's Flight Radio Management Corporation (HFRM), a brand new small business specializing in flight management systems (FMS). The owner, Howard Allan, is a former Air Force pilot and retired Colonel, but definitely not an accountant. Your job is to help Howard put his affairs in order. Luckily Howard has only been in operation for a month and things have not gotten too out of hand yet! Howard has to submit his financial statements to his investors and doesn’t know where to begin. It’s your job to go through the complete Accounting cycle to prepare the financial statements for the HFRM.

Began business by making a deposit in a company bank account of $20,000, in exchange for 2,000 shares of $10 par value common stock.

Paid the premium on a 1-year insurance policy, $2,400.

Paid the current month's rent expense, $1,900.

Purchased repair equipment from Fred Company, $5,800. Paid $1,000 down and the balance was placed on account.  Payments will be $400.00 per month for 12 months. The first payment is due 4/1. Note: Use Accounts Payable for the Balance Due.

Purchased repair supplies from Gary Company on credit, $650.