Question

Shelton Engineering completed the following transactions in the month of October. Prepare journal entries to record each transaction in the journal on the following page.

a. October 1 -- Shana Shelton, the owner, invested $105,000 cash, office equipment with a value of $6,000, and $45,000 drafting equipment to launch the company in exchange for common stock.

b. October 2 -- The Company purchased land worth $54,000 for an office by paying $5,400 cash and signing a long-term note payable for the remainder.

c. October 2 -- The Company paid $6,000 cash for the premium on an 18-month insurance policy.

d. October 10 -- The Company completed $12,000 of engineering services for a client. This amount is to be received in 30 days.

e. October 15 -- The Company received a bill for rent of equipment that was used on a recently completed job. The $1,200 rent cost must be paid within 30 days.

f. October 16 -- The Company received a $5,000 check from a customer as down payment for a job to begin the following month.

g. October 31 – Paid wages of $ 1,000 to employees.

h. October 31 – The Company declared and paid a $500 cash dividend.

Answer 1

Journal Entries for the month of March
Date	Particulars	Debit	Credit
Oct-01	Cash A/C	105000
	office equipment A/C	6000
	Drafting Expenses A/C	45000
	To Capital A/C		156000
	(Being Capital Introduced)
Oct-02	Land A/C	54000
	Cash A/C		5400
	To Long Term Note Payable A/C		48600
	(Being Land purchased)
Oct-02	Insurance Premium A/C	4000
	Insurance Premium Prepiad A/C	2000
	To Cash		6000
	(Being Insurance Premium paid and assumed that 6 moths of policy is in next Period)
Oct-10	Accounts Receivable A/C	12000
	To Sales		12000
	( Being Services provided on credit basis)
Oct-15	Rent A/C	1200
	To Supplier - Accounts Payable A/C		1200
	(Being Rent Payable)
Oct-16	Bank A/C	5000
	To Customer -Advance from Customers A/C		5000
	(Being Advance Received for a contract)
Oct-31	Wages A/C	1000
	To Bank A/C		1000
Oct-31	Reserves A/C	500
	To Dividend Payable A/C		500
	( Being Dividend Declared)
Oct-31	Dividend Payable A/C	500
	To Bank A/C		500
	( Being Dividend Paid)