In: Accounting
ADC Studios was organized on January 1 2015. During the month the following transactions were carried out by ADC Studios:
Jan 01Sold capital stock to investors for $40,000.
Jan 03Paid $1200 in advance for 3 months rent of an office.
Jan 12Purchased equipment for $6,000; made a 50% cash down payment with the balance due in 30 days.
Jan 15Performed filming for a fee of $400; will be paid in 3 weeks.
Jan 18Made a payment of $500 on the equipment purchased on January 12.
Important: Present proper Journal Entries and show posting to the T Accounts.
1 | Journal entries: | ||||||||
Date | Account titles | Debit | Credit | ||||||
Jan 01. | Cash | 40000 | |||||||
Stockholders Equity | 40000 | ||||||||
(Sold capital stock) | |||||||||
Jan 03. | Prepaid Rent | 1200 | |||||||
Cash | 1200 | ||||||||
(Paid rent in advance) | |||||||||
Jan 12. | Equipment | 6000 | |||||||
Cash | (6000*50%) | 3000 | |||||||
Accounts payable | 3000 | ||||||||
(Purchased equipment) | |||||||||
Jan 15. | Accounts Receivable | 400 | |||||||
Filming Revenue | 400 | ||||||||
(Performed filmimg for a fee) | |||||||||
Jan 18. | Accounts payable | 500 | |||||||
Cash | 500 | ||||||||
(Paid for the equipment) | |||||||||
2 | Cash | Accounts Receivable | |||||||
Date | Debit | Date | Credit | Date | Debit | Date | Credit | ||
Jan 01. | 40000 | Jan 03. | 1200 | Jan 15. | 400 | ||||
Jan 12. | 3000 | ||||||||
Jan 18. | 500 | ||||||||
40000 | 4700 | ||||||||
Bal. | 35300 | ||||||||
Prepaid Rent | Equipment | ||||||||
Date | Debit | Date | Credit | Date | Debit | Date | Credit | ||
Jan 03. | 1200 | Jan 12. | 6000 | ||||||
Accounts Payable | Stockholders Equity | ||||||||
Date | Debit | Date | Credit | Date | Debit | Date | Credit | ||
Jan 18. | 500 | Jan 12. | 3000 | Jan 01. | 40000 | ||||
500 | 3000 | ||||||||
Bal. | 2500 | ||||||||
Filming Revenue | |||||||||
Date | Debit | Date | Credit | ||||||
Jan 15. | 400 | ||||||||
3 | Trail balamce | ||||||||
ADC studios | |||||||||
Debit | Credit | ||||||||
Cash | 35300 | ||||||||
Accounts Receivable | 400 | ||||||||
Prepaid Rent | 1200 | ||||||||
Equipment | 6000 | ||||||||
Accounts Payable | 2500 | ||||||||
Stockholders Equity | 40000 | ||||||||
Filming Revenue | 400 | ||||||||
Totals | 42900 | 42900 |