Question

Question 2                                                                                                                   8 marks

The following information relates to the business of Paisley’s Guitar School for the month of June 2019:

June

1       Purchased equipment for $42,000. Paid $6,000 deposit and agreed to pay the balance in 60 days.

3       Paid salaries of $15,800.

8       Brad Paisley withdrew $21,000 from the business for his personal use.

14      Paid $9,800 for radio commercials incurred.

19      Paid $7,400 to creditors for supplies that had previously been purchased on credit.

23      Received $3,700 from customers to reduce the balance in their accounts.

30      Earned $78,000 in tuition fees during the month. Of these, 25% of the fees were collected in cash and 75% will be paid within 2 months.

Required:

Prepare the general journal entries to record the above transactions that occurred during June 2019 (ignore GST, and narrations are NOT required).                     

                                                                       

Date	Particulars	Debit	Credit
June 1st
June 3rd
June 8th
June 14th
June 19th
June 23rd
June 30th

Answer 1

Date	Account/Description	Debit	Credit
01-Jun-20	Equipment A/c Dr.	$42,000.00
	To Bank A/c		$   6,000.00
	To Capital Creditors A/c		$36,000.00
	(Being paid for purchase of equipment)
03-Jun-20	Salaries A/c Dr.	$15,800.00
	To Cash A/c		$15,800.00
	(Being paid as salary expenses)
08-Jun-20	Drawings A/c Dr.	$21,000.00
	To Cash A/c		$21,000.00
	(Being withdrawn for personal purpose)
14-Jun-20	Advertisement Expenses A/c Dr.	$   9,800.00
	To Cash A/c		$   9,800.00
	(Being paid for advertisement expenses)
19-Jun-20	To Capital Creditors A/c	$   7,400.00
	To Cash A/c		$   7,400.00
	(Being paid to capital creditors)
23-Jun-20	Cash A/c Dr.	$   3,700.00
	To Trade receivables A/c		$   3,700.00
	(Being amount received from trade receivables
30-Jun-20	Cash A/c Dr.	$19,500.00
	Trade receivables A/c	$58,500.00
	To Revenue from tution		$78,000.00
	(Being tution fees earned)