Question

Journal Entries and Trial Balance

On October 1, 20Y6, 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, $27,600.
	4.	Paid rent for period of October 4 to end of month, $2,680.
	10.	Purchased a used truck for $23,000, paying $2,000 cash and giving a note payable for the remainder.
	13.	Purchased equipment on account, $10,760.
	14.	Purchased supplies for cash, $1,850.
	15.	Paid annual premiums on property and casualty insurance, $4,140.
	15.	Received cash for job completed, $11,590.

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, $3,840.
	24.	Recorded jobs completed on account and sent invoices to customers, $13,190.
	26.	Received an invoice for truck expenses, to be paid in November, $1,210.
	27.	Paid utilities expense, $1,380.
	27.	Paid miscellaneous expenses, $500.
	29.	Received cash from customers on account, $5,520.
	30.	Paid wages of employees, $3,670.
	31.	Withdrew cash for personal use, $3,060.

Required:

1. Journalize 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. (Do not insert the account numbers in the journal at this time.) Journal entry explanations may be omitted. If an amount box does not require an entry, leave it blank.

11 Cash	31 Jay Pryor, Capital
12 Accounts Receivable	32 Jay Pryor, Drawing
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
20Y6
Oct. 1
Oct. 4
Oct. 10
Oct. 13
Oct. 14
Oct. 15
Oct. 15

General Journal				Page 2
Date	Description	Post. Ref.	Debit	Credit
20Y6
Oct. 21
Oct. 24
Oct. 26
Oct. 27
Oct. 27
Oct. 29
Oct. 30
Oct. 31

Answer 1

1) Journal Entries:

General Journal
Date	Description	Post. Ref.	Debit	Credit
20Y6
Oct. 1	Cash		$27,600
	Jay Pryor, Capital			$27,600
	(To record the cash invested in the business)
Oct. 4	Rent Expense		$2,680
	Cash			$2,680
	(To record the payment of rent expense)
Oct. 10	Truck		$23,000
	Cash			$2,000
	Notes Payable ($23,000 - $2,000)			$21,000
	(To record the purchase of truck by cash and issuing note)
Oct. 13	Equipment		$10,760
	Accounts Payable			$10,760
	(To record the purchase of equipment on account)
Oct. 14	Supplies		$1,850
	Cash			$1,850
	(To record the purchase of supplies by cash)
Oct. 15	Prepaid Insurance		$4,140
	Cash			$4,140
	(To record the prepayment of insurance for one year)
Oct. 15	Cash		$11,590
	Fees Earned			$11,590
	(To record the cash received on the completion of job)
Oct. 21	Accounts Payable		$3,840
	Cash			$3,840
	(To record the payment of accounts payable)
Oct. 24	Accounts Receivable		$13,190
	Fees Earned			$13,190
	(To record the completion of jobs on account)
Oct. 26	Truck Expense		$1,210
	Accounts Payable			$1,210
	(To record the truck expense incurred and payable)
Oct. 27	Utilities Expense		$1,380
	Cash			$1,380
	(To record the payment of utilities expense)
Oct. 27	Miscellaneous Expenses		$500
	Cash			$500
	(To record the payment of miscellaneous expenses)
Oct. 29	Cash		$5,520
	Accounts Receivable			$5,520
	(To record the collection of accounts receivable)
Oct. 30	Wages Expense		$3,670
	Cash			$3,670
	(To record the payment of wages expenses)
Oct. 31	Jay Pryor, Drawing		$3,060
	Cash			$3,060
	(To record the cash withdrew for personal use)