Question

Problem 1 Part A Note: It is suggested that you read all both parts of Problem 1 before you start so that you structure your space requirements for the answer appropriately. Several friends grouped themselves as shareholders and Emerald Delivery Limited opened for business September 1 2018. The transactions for the month are listed. You are to create the journal entries in good form for these transactions. Sept 12015 - Shareholders started the company with 20,000 of their own cash Sept 42015 - Bought a delivery truck for $ 30,000. Bill borrowed $25,000 from the bank as part of the payment for the truck Sept 8, 2015 - Paid rent on a small office for the month of September of $1,200. Sept 15, 2015 - Bought liability insurance for $450 Sept 18 2015 - Received payment in cash for $2.500 in delivery services Sept 202015 - Paid salaries of $600 for his part time driver Sept 25, 2015 - Paid the utilities on account for the office for $125 Sept 30 2015 - Paid Dividends of $700 Sept 30, 2015 - Billed customers for $1,100 of delivery services

Answer 1

	Journal:
Date	Account title	Debit	Credit
SEPT.01 2015	Cash	$ 20,000
	Common stock		$ 20,000
	(To record the cash invested $20,000)
SEPT.04 2015	Truck	$ 30,000
	Cash		$   5,000
	(To record the purchase of truck)
SEPT.04 2015	Cash	$ 25,000
	Notes payable		$ 25,000
	(To record the bank borrowing)
SEPT.08 2015	Rent Expenses	$   1,200
	Cash		$   1,200
	(To record the rent expenses)
SEPT.15 2015	Prepaid Insurance	$      450
	Cash		$      450
	(To record the purchase of liability insurance)
SEPT.18 2015	Cash	$   2,500
	Service Rendered		$   2,500
	(To record the receipt of cash for delivery services)
SEPT.20 2015	Salaries Expenses	$      600
	Cash		$      600
	(To record the part time salaries expenses)
SEPT.25 2015	Accounts payable	$      125
	Cash		$      125
	(To record the payment for utilities on account)
SEPT.30 2015	Dividends	$      700
	Cash		$      700
	(To record the dividend paid)
SEPT.30 2015	Accounts receivable	$   1,100
	Cash		$   1,100
	(To record the rendering of service on account)

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