Question

Journal Entries and Trial Balance

On October 1, 2018, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business:

Oct.	1	Jay transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $23,700.
	4	Paid rent for period of October 4 to end of month, $2,300.
	10	Purchased a used truck for $20,000, paying $2,000 cash and giving a note payable for the remainder.
	13	Purchased equipment on account, $9,240.
	14	Purchased supplies for cash, $1,590.
	15	Paid annual premiums on property and casualty insurance, $3,560.
	15	Received cash for job completed, $9,950.

Enter the following transactions on Page 2 of the two-column journal:

	21	Paid creditor a portion of the amount owed for equipment purchased on October 13, $3,290.
	24	Recorded jobs completed on account and sent invoices to customers, $11,330.
	26	Received an invoice for truck expenses, to be paid in November, $1,040.
	27	Paid utilities expense, $1,190.
	27	Paid miscellaneous expenses, $430.
	29	Received cash from customers on account, $4,740.
	30	Paid wages of employees, $3,150.
	31	Paid dividends, $2,630.

Required:

1. Journalize and insert the posting references for each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. For a compound transaction, if an amount box does not require an entry, leave it blank.

11	Cash	31	Common Stock
12	Accounts Receivable	33	Dividends
13	Supplies	41	Fees Earned
14	Prepaid Insurance	51	Wages Expense
16	Equipment	53	Rent Expense
18	Truck	54	Utilities Expense
21	Notes Payable	55	Truck Expense
22	Accounts Payable	59	Miscellaneous Expense

General Journal				Page 1
Date	Description	Post. Ref.	Debit	Credit
2018
Oct. 1
Oct. 4
Oct. 10
Oct. 13
Oct. 14
Oct. 15
Oct. 15

General Journal				Page 2
Date	Description	Post. Ref.	Debit	Credit
2018
Oct. 21
Oct. 24
Oct. 26
Oct. 27
Oct. 27
Oct. 29
Oct. 30
Oct. 31

Answer 1

General Journal
Date	Description	Post. Ref.	Debit	Credit
2018
Oct. 1	Cash		$23,700
	Common Stock			$23,700
	(To record the cash invested in the business)
Oct. 4	Rent Expense		$2,300
	Cash			$2,300
	(To record the payment of rent expense)
Oct. 10	Truck		$20,000
	Cash			$2,000
	Notes Payable ($20,000 - $2,000)			$18,000
	(To record the purchase of truck by cash and issuing note)
Oct. 13	Equipment		$9,240
	Accounts Payable			$9,240
	(To record the purchase of equipment on account)
Oct. 14	Supplies		$1,590
	Cash			$1,590
	(To record the purchase of supplies by cash)
Oct. 15	Prepaid Insurance		$3,560
	Cash			$3,560
	(To record the prepayment of insurance for one year)
Oct. 15	Cash		$9,950
	Fees Earned			$9,950
	(To record the cash received on the completion of job)
Oct. 21	Accounts Payable		$3,290
	Cash			$3,290
	(To record the payment of accounts payable)
Oct. 24	Accounts Receivable		$11,330
	Fees Earned			$11,330
	(To record the completion of jobs on account)
Oct. 26	Truck Expense		$1,040
	Accounts Payable			$1,040
	(To record the truck expense incurred and payable)
Oct. 27	Utilities Expense		$1,190
	Cash			$1,190
	(To record the payment of utilities expense)
Oct. 27	Miscellaneous Expenses		$430
	Cash			$430
	(To record the payment of miscellaneous expenses)
Oct. 29	Cash		$4,740
	Accounts Receivable			$4,740
	(To record the collection of accounts receivable)
Oct. 30	Wages Expense		$3,150
	Cash			$3,150
	(To record the payment of wages expenses)
Oct. 31	Dividends		$2,630
	Cash			$2,630
	(To record the payment of dividends)