Question

Prepare journal entries to record the transactions for TC Company

Listed below are the transactions of TC Company (a service company organized as a corporation), for the month of March. Record the following transactions for TC Company.

Mar    1        Nancy R. invests $50,000 cash in exchange for common stock in

                   TC Company.

          1        Takes out a $5,000, 30-day short term note payable with an annual

                    interest rate of 6%.

          1        Purchases medical equipment on account from KR Enterprises

                   for $22,800.

          3        Pays rent for office space, $1,500 for the month.

          3        Employs a receptionist, Sam Smith.

          4       Purchases medical supplies for cash, $1,165.

          10      Receives cash of $850 from patients for services performed.

          15      Bills patients $11,560 for services performed.

          21      Pays KR Enterprises on account, $7,600 (for partial payment of items                     purchased on Mar 1.).

          26      Receives $2,600 from patients on account (for services provided and                      billed on Mar 15)

          30      Bills patients $6,890 for services performed.

          31      Pays the following expenses in cash: Salaries and

                   wages $2,500; miscellaneous office expenses $910.

          31      Pays principal and interest on the note payable.

          31      Medical supplies used during the month, $695.

          31     Record depreciation expense on the equipment using the straight line

                   method; the equipment has a 5-year life and no salvage value.

          31     Record utility expense of $200 incurred for the month; bill not

                   paid at month end

Chart of Accounts:

Cash

Accounts Receivable

Supplies

Equipment

Accumulated Depreciation—Equipment

Accounts Payable

Notes Payable (short term)

Common Stock

Service Revenue

Rent Expense

Office Expense

Salaries and Wages Expense

Supplies Expense

Depreciation Expense

Interest Expense

Utility Expense

Income Summary

Answer 1