Question

During October 2020, John just started Home Reno business as a sole proprietorship and he has carried some business activities over the month. please see the list below:

John invested $50,000 cash in Home Reno John purchased annual business insurance for $1,200 John purchased a pickup truck with an auto loan of $35,000 from the car dealer. With the promotion, John will receive the 2 years loan as interest-free. John purchased tools from Rona, $5,000 on credit. John rent a storage space for $300 per month John also paid $100 to advertise his business in the local newspaper. John finished a painting job for $1,500 and send an invoice to his customer Paid for the tool purchased Oct 3 on credit. Received the full payment from the client who he invoiced John received $10,000 from his client for a prepaid flooring job, which he will start next month. Paid $400 for gasoline for his truck which can be recorded as travel expenses Paid his assistant salary, $3,500 John withdrew $5,000 from the business as well. Paid the cellphone bill, $50 John had a meeting with his client and gave an estimated price, $20,000, for an upcoming job Prepare the journal entry for Home Reno.

Answer 1

Date	General Journal	Debit	Credit
October.2020
	Cash	$50,000
	Capital Account		$50,000
	(To record cash invested in business)
	Prepaid Insurance	$1,200
	Cash		$1,200
	(To record insurance purchase for 1 year)
	Truck	$35,000
	Loan		$35,000
	(To record purchase of truck)
	Tools	$5,000
	Accounts payable		$5,000
	(To record purchase of tools on account)
	Rent Expense (Assumed paid)	$300
	Cash		$300
	(To record payment of rent expense)
	Advertisement Expense	$100
	Cash		$100
	(To record advertising expense)
	Accounts Receivable	$1,500
	Sales Revenue		$1,500
	(To record sales revenue on account)
	Accounts Payable	$5,000
	Cash		$5,000
	(To record payment on account)
	Cash	$1,500
	Accounts Receivable		$1,500
	(To record collection of payment on account)
	Cash	$10,000
	Unearned Revenue		$10,000
	(to record cash received for unearned revenue)
	Travel Expense	$400
	Cash		$400
	(To record payment for gasoline)
	Salaries Expense	$3,500
	Cash		$3,500
	(To record payment for salary)
	Drawing Account	$5,000
	Cash		$5,000
	(To record withdrawal of cash for personal purpose)
	Telephone Expense	$50
	Cash		$50
	(To record payment for cell phone bill)
	No entry is required for giving estimated price for Job

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