Question

Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (the amounts are rounded to thousands of dollars to simplify):

Account Titles	Debit			Credit
Cash	$	3
Accounts Receivable		5
Supplies		12
Land		0
Equipment		58
Accumulated Depreciation				$	6
Software		16
Accumulated Amortization					7
Accounts Payable					5
Notes Payable (short-term)					0
Salaries and Wages Payable					0
Interest Payable					0
Income Tax Payable					0
Common Stock					68
Retained Earnings					8
Service Revenue		0
Salaries and Wages Expense		0
Depreciation Expense		0
Amortization Expense		0
Income Tax Expense		0
Interest Expense		0
Supplies Expense		0
Totals	$	94		$	94

Transactions and events during 2018 (summarized in thousands of dollars) follow:

Borrowed $12 cash on March 1 using a short-term note.

Purchased land on March 2 for future building site; paid cash, $9.

Issued additional shares of common stock on April 3 for $26.

Purchased software on July 4, $10 cash.

Purchased supplies on account on October 5 for future use, $18.

Paid accounts payable on November 6, $13.

Signed a $25 service contract on November 7 to start February 1, 2019.

Recorded revenues of $156 on December 8, including $38 on credit and $118 collected in cash.

Recognized salaries and wages expense on December 9, $83 paid in cash.

Collected accounts receivable on December 10, $22.

Data for adjusting journal entries as of December 31:

Unrecorded amortization for the year on software, $7.

Supplies counted on December 31, 2018, $10.

Depreciation for the year on the equipment, $6.

Interest of $1 to accrue on notes payable.

Salaries and wages earned but not yet paid or recorded, $12.

Income tax for the year was $8. It will be paid in 2019.

Required:

Record journal entries for transactions (a) through (j). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.)

Answer 1

H&H Tools

Journal entries to record transactions a. through j.:

Date	Account Titles and Explanation	Ref. No.	Debit	Credit
1-Mar	Cash		$12
	Short-Term Note			$12
	(To record cash borrowed on short-term note)
2-Mar	Land		$9
	Cash			$9
	(To record purchase of land)
3-Apr	Cash		$26
	Common Stock			$26
	(To record issue of additional shares)
4-Jul	Software		$10
	Cash			$10
	(Purchase of software)
5-Oct	Supplies		$18
	Accounts Payable			$18
	(To record purchase of supplies on account)
6-Nov	Accounts Payable		$13
	Cash			$13
	(To record accounts payable paid)
7-Nov	No Entry
8-Dec	Cash		$118
	Accounts Receivable		$38
	Service Revenue			$156
	(To record cash sales and account sales)
9-Dec	Salaries and Wages Expense		$83
	Cash			$83
	(To record salaries and wages paid)
10-Dec	Cash		$22
	Accounts Receivable			$22
	(Collection on accounts receivable)

Note: On Nov 7, the company signed a service contract, but no actual transaction took place. Hence, No Entry.