Question

1.

Required information

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Hometown Electric is owned and operated by James Wilson. The shop's accounts are presented below. Review the transactions presented and determine the appropriate debits and credits to the affected accounts.

Cash

Accounts receivable

Office supplies

Prepaid rent

Equipment

Accounts payable

J. Wilson, Capital

J. Wilson, Drawing

Fees income

Rent expense

Utilities expense

Salaries expense

1.Paid utility bill of $850.

2.Provided repair services and received payment of $1,500.

3.Paid $6,000 in cash for the next six months’ rent.

4.Received $600 that was previously owed by a customer.

5.Purchased Equipment on account for $2,700.

6.Paid $1,000 in partial payment for the previously-purchased equipment.

7.James Wilson withdrew $1,000 from the business for personal use.

Answer 1

1 Paid utility bill of $850

Utility Expenses A/C Dr	850
Cash A/C		$850
Paid utility Expenses
Utility Expenses account debit and cash account credit by $850

2 Provided repair service and received payment of $1500

Cash A/C Dr	1500
Fee income A/C		1500
Cash received for repair service.
Cash account debit and fee income account credit by $1500.

3 Paid $6,000 in cash for next six months rent

Prepaid rent A/C Dr	6000
Cash A /C		6,000
Paid rent in advance.
Prepaid rent account debit and cash Account credit by 6,000

4 received $600 that was previously owned by a customer.

Cash A /C Dr	600
Accounts receivable		600
Received cash from account receivable
Cash account debit and Accounts Receivable account credit by$6,000

5 Purchase equipment on account for $2700

Equipment A/C Dr	2700
Accounts payable		2700
Purchase equipment on accounts.
Equipment account debit and Accounts payable account credit by $2,700

6 Paid $1000 in partial payment for the previously purchased equipment.

Accounts Payable A/C Dr	1000
Cash A/C		1000
Paid cash to account payable for equipment purchase.
Accounts payable account debit and cash account credit by $1,000

7

Wilson drawing A/C Dr	850
Cash A/C		850
Wilson withdraw cash
Wilson's drawing account debit and cash account credit by $850.

For Adjustment of drawings in capital account.

Wilson capital A/C Dr	850
Wilson's drawing A/C		850

For Adjustment of drawing in capital account of Wilson so Wilson capital account debit and drawing account credit by $850.