Question

Record the following transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1.

(a) Started business by issuing 10,000 shares of common stock for $30,000.
(b) Hired Rebecca as an administrative assistant, promising to pay her $2,900 every two weeks.
(c) Rented a building for three years at $570 per month and paid six months' rent in advance.
(d) Purchased equipment for $5,000 cash.
(e) Purchased $1,900 of supplies on account.
(f) Provided services to customers for $7,200 cash.
(g) Paid employees’ salaries, $5,800.
(h) Paid for supplies purchased in item (e).
(i) Paid $810 for current advertising in a local newspaper.
(j) Paid utility bill of $1,200 for the current month.

2. A company provides services to customers on account, $4,900.

3. A company collects $5,100 cash from customers for services previously provided on account.

4. A company purchases a building for $200,000, paying $29,000 cash and signing a note payable for the remainder.

Answer 1

Transaction	Accoun title and explanation	Debit	Credit
1
(a)	Cash	$ 30,000
	Common stock		$ 30,000
(b)	No entry required
(c)	Prepaid rent ($570*6 months)	$ 3,420
	Cash		$ 3,420
(d)	Equipment	$ 5,000
	Cash		$ 5,000
(e)	Supplies	$ 1,900
	Accounts payable		$ 1,900
(f)	Cash	$ 7,200
	Service revenue		$ 7,200
(g)	Salaries expense	$ 5,800
	Cash		$ 5,800
(h)	Accounts payable	$ 1,900
	Cash		$ 1,900
(i)	Advertisement expense	$ 810
	Cash		$ 810
(j)	Utilities expense	$ 1,200
	Cash		$ 1,200
2	Accounts receivable	$ 4,900
	Service revenue		$ 4,900
3	Cash	$ 5,100
	Accounts receivable		$ 5,100
4	Building	$ 200,000
	Cash		$ 29,000
	Notes payable		$ 171,000