Question

Journal Entries and Trial Balance

On June 1, 2019, Kris Storey established an interior decorating business, Eco-Centric Designs. During the month, Kris completed the following transactions related to the business.

June	1.	Kris transferred cash from a personal bank account to an account to be used for the business, $29,700.
	4.	Paid rent for period of June 4 to end of month, $2,880.
	6.	Purchased a truck for $25,000, paying $2,000 cash and giving a note payable for the remainder.
	8.	Purchased equipment on account, $11,580.
	10.	Purchased supplies for cash, $1,990.
	12.	Paid annual premiums on property and casualty insurance, $4,460.
	15.	Received cash for job completed, $12,470.

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

	23.	Paid creditor a portion of the amount owed for equipment purchased on June 13, $4,130.
	24.	Recorded jobs completed on account and sent invoices to customers, $14,200.
	25.	Received an invoice for truck expenses, to be paid in July, $1,310.
	26.	Paid utilities expense, $1,490.
	27.	Paid miscellaneous expenses, $530.
	28.	Received cash from customers on account, $5,940.
	29.	Paid wages of employees, $3,950.
	30.	Withdrew cash for personal use, $3,300.

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. For a compound transaction, if an amount box does not require an entry, leave it blank.

11 Cash	31 Kris Storey, Capital
12 Accounts Receivable	32 Kris Storey, 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

Answer 1

Solution :-

1. Journalize each transaction in a two-column journal :-

Date	Account details	Debit	Credit
June 1	Cash	$29,700
	Kris Storey, Capital		$29,700
June 4	Rent expense	$2,880
	Cash		$2,880
June 6	Truck	$25,000
	Cash		$2,000
	Note payable		= 25,000 - 2,000 = $23,000
June 8	Equipment	$11,580
	Account payable		$11,580
June 10	Supplies	$1,990
	Cash		$1,990
June 12	Prepaid insurance	$4,460
	Cash		$4,460
June 15	Cash	$12,470
	Fees earned		$12,470
June 23	Account payable	$4,130
	Cash		$4,130
June 24	Account receivable	$14,200
	Fees earned		$14,200
June 25	Truck expense	$1,310
	Account payable		$1,310
June 26	Utilities expense	$1,490
	Cash		$1,490
June 27	Miscellaneous expense	$530
	Cash		$530
June 28	Cash	$5,940
	Account receivable		$5,940
June 29	Wage expense	$3,950
	Cash		$3,950
June 30	Kris storey, Drawing	$3,300
	Cash		$3,300