Home Work 1
Company A, Prepare the Journal entries for the following transaction ?
Date
Transaction
Jan 1
Fahad invested $100,000 in company A
Jan 2
An amount of $36,000 was paid as advance rent for three months.
Jan 3
Paid $60,000 cash on the purchase of equipment costing $80,000. The remaining
amount was recognized as a one year note payable.
Jan 4
Purchased office supplies costing $17,600 on account.
Jan
Provided services to its customers and received $28,500 in cash.
13
Jan
Paid the accounts payable on the office supplies purchased on January 4.
13
Jan
Paid salary to its employees for first two weeks of January, total $19,100.
14
Jan
Provided $54,100 worth of services to its customers. They paid $32,900 and
18
promised to pay the remaining amount.
Jan
Received $15,300 from customers for the services provided on January 18.
23
Jan
Received $4,000 as an advance payment from customers.
25
Jan
Purchased office supplies costing $5,200 on account.
26
Jan
Paid wages to its employees for the third and fourth week of January: $19,100.
28
Jan
Paid $5,000 as dividends.
31
Jan
Received electricity bill of $2,470.
31
Jan
Received telephone bill of $1,494.
31
Jan
31
Miscellaneous (other) expenses paid during the month totaled $3,470
Date
Account
Jan 1
Cash
Debit
100,000
Common Stock
100,000
- Invest in company A
Jan 2
Prepaid Rent
36,000
Cash
36,000
- Cash Rent payment
Jan 3
Equipment
80,000
Cash
60,000
Notes Payable
20,000
- Purchase Equipment by cash and A/p
Jan 4
Office Supplies
17,600
Accounts Payable
17,600
- Purchased office supplies on account
Jan
13
Cash
28,500
Service Revenue
28,500
- Provide service to customer
Jan
13
Accounts Payable
17,600
Cash
17,600
- Payment against A/P for office supplies
Jan
14
Salaries Expense
19,100
Cash
19,100
- Salaries payment for two weeks.
Jan
18
Credit
Cash
32,900
Accounts Receivable
21,200
Service Revenue
- Provide service to customer for cash and
54,100
on Account.
Jan
23
Cash
15,300
Accounts Receivable
-
Received cash from customer for the service
15,300
Provided on account.
Jan
25
Cash
4,000
Unearned Revenue
- Received an advance payment from customer
4,000
Jan
26
Office Supplies
5,200
Accounts Payable
5,200
- purchase office supplies on account .
Jan
28
Wages Expense
19,100
Cash
- Paid wages for employees for the third and
19,100
Fourth week.
Jan
31
Dividends
5,000
Cash
5,000
- Paid Dividend for share holders.
Jan
31
Electricity Expense
2,470
Utilities Payable
2,470
- Received electricity bill
Jan
31
Telephone Expense
1,494
Utilities Payable
1,494
- Received telephone bill
Jan
31
Miscellaneous Expense
Cash
- Other Expenses paid
3,470
3,470
Example
The ledger accounts shown below are derived from the Journal of Company
A.
Asset Accounts
Cash
$100,000
28,500
32,900
15,300
4,000
$36,000
60,000
17,600
19,100
19,100
5,000
3,470
$20,430
Office Supplies
$17,600
5,200
$22,800
Accounts Receivable
$21,200
$15,300
$5,900
Prepaid Rent
$36,000
$36,000
Equipment
$80,000
$80,000
Liability Accounts
Accounts Payable
$17,600
$17,600
5,200
$5,200
Notes Payable
$20,000
$20,000
Utilities Payable
$2,470
1,494
$3,964
Unearned Revenue
$4,000
$4,000
Equity Accounts
Common Stock
$100,000
$100,000
Revenue, Dividend and Expense Accounts
Service Revenue
$28,500
54,100
$82,600
Dividend
$5,000
$5,000
Wages Expense
$19,100
19,100
$38,200
Miscellaneous Expense
$3,470
Electricity Expense
$2,470
$2,470
Telephone Expense
$1,494
$1,494
$3,470