Question
In: Accounting
Prepare the following journal entries in proper journal entry form. 1. Purchased a 1-year insurance policy,...
Prepare the following journal entries in proper journal entry form.
1. Purchased a 1-year insurance policy, paid $2,640.
2. Billed a customer for a $2,100 job.
3. Received $4,800 to start an eight-month job, beginning next month.
4. Bought a computer on credit for $3,600.
5. Contributed cash of $3,400 to a business checking account.
6. Received a gas bill, $300.
7. Paid $400 for van repairs.
8. Purchased supplies for $400 in cash.
9. Transferred $3,600 to his personal checking account.
10. Received $1,150 for a job he just completed.
11. The first month of the job in number 3 above has passed.
12. Hired an assistant, agreed to pay them $800 per week.
13. Purchased a van for $22,000 cash and a computer for $5,000 on account.
14. Received $4,000 from a customer for a job previously completed.
15. Paid $3,500,000 for a building worth $8,000,000, signed a note payable for the remainder.
16. Paid $4,500 for 3 months rent.
17. Invested $2,000 of personal funds in the company’s cash account in exchange for equity.
18. Paid first of 12 installments regarding transaction in number 4, above.
19. Paid his assistant for a month’s work.
20. Earned additional revenues amounting to $800: $600 in cash and $200 on account.
21. One month has passed since transaction number 16 above.
22. Depreciation on the building for the month was $120,000, credited accum. deprec.
23. Received $1,400 in payment for services previously rendered.
24. One month has passed since the insurance policy in number 1 above was purchased.
25. Customer paid $7,000 on a $9,000 job just completed.
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Expert Solution
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| Journal Entry | |||
| No. | Account | Debit $ | Credit $ |
| 1 | Prepaid Insurance | 2,640.00 | |
| Cash | 2,640.00 | ||
| (Being 1-year insurance policy purchased) | |||
| 2 | Customer | 2,100.00 | |
| Service Revenue | 2,100.00 | ||
| (Being billed a customer for a job) | |||
| 3 | Cash | 4,800.00 | |
| Advance from Customer | 4,800.00 | ||
| (Being cash received to start an eight-month job) | |||
| 4 | Computer | 3,600.00 | |
| Accounts Payable | 3,600.00 | ||
| (Being computer purchased on credit) | |||
| 5 | Cash | 3,400.00 | |
| Owner's Capital | 3,400.00 | ||
| (Being cash contributed to a business checking account) | |||
| 6 | Power & Fuel | 300.00 | |
| Accounts Payable | 300.00 | ||
| (Being gas bill received) | |||
| 7 | Repairs | 700.00 | |
| Cash | 700.00 | ||
| (Being cash paid for van repairs) | |||
| 8 | Supplies | 400.00 | |
| Cash | 400.00 | ||
| (Being cash paid for supplies) | |||
| 9 | Owner's Withdrawals | 3,600.00 | |
| Cash | 3,600.00 | ||
| (Being cash transferred to his personal checking account) | |||
| 10 | Cash | 1,150.00 | |
| Service Revenue | 1,150.00 | ||
| (Being cash received for a job just completed) | |||
| 11 | Advance from Customer | 600.00 | |
| Sales | 600.00 | ||
| (Being revenue recorded after the first month of the job completed) | |||
| 12 | No entry required as only hiring is done and no payment is made. | ||
| 13 | Van | 22,000.00 | |
| Cash | 22,000.00 | ||
| (Being van purchased for cash) | |||
| Computer | 5,000.00 | ||
| Accounts Payable | 5,000.00 | ||
| (Being computer purchased on account) | |||
| 14 | Cash | 4,000.00 | |
| Service Revenue | 4,000.00 | ||
| (Being cash received for a job completed) | |||
| 15 | Building | 8,000,000.00 | |
| Cash | 3,500,000.00 | ||
| Note Payable | 4,500,000.00 | ||
| (Being building purchased in cash and credit) | |||
| 16 | Prepaid Rent | 4,500.00 | |
| Cash | 4,500.00 | ||
| (Being rent paid in cash) | |||
| 17 | Cash | 2,000.00 | |
| Owner's Capital | 2,000.00 | ||
| (Being cash contributed to a business checking account) | |||
| 18 | Accounts Payable | 300.00 | |
| Cash | 300.00 | ||
| (Being first installment paid for computer purchased on credit) | |||
| 19 | Salary Expense | 800.00 | |
| Cash | 800.00 | ||
| (Being assistant was paid for a month’s work) | |||
| 20 | Cash | 600.00 |
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