Question

(a) Ace Company has the following transactions in the month of April.

1 April Peter invests $100,000 cash and an office equipment valued at $20,000 in the company.

2 April The company purchased $800 of office supplies on credit.

15 April The company completed $5,000 of services for a client, who must pay within 30 days.

28 April The company received a utility bill amounting $500.

30 April The company sold off an equipment costing $3,000 with a net book value of $2,000 for $1,600 cash.

Analyse the above information and prepare the journal entries for Ace Company for the month of April. Narrations are not required.

Answer 1

Journal Entries
Date	Account Titles and Explanation	Debit	Credit
Apr. 1	Cash	$100,000
	Office Equipment	$20,000
	Common Stock ($100,000 + $20,000)		$120,000
	(To record the issue of common stock)
Apr. 2	Office Supplies	$800
	Accounts Payable		$800
	(To record the purchase of office supplies on account)
Apr. 15	Accounts Receivable	$5,000
	Service Revenue		$5,000
	(To record the services provided on account)
Apr. 28	Utilities Expense	$500
	Accounts Payable		$500
	(To record the utilities expense incurred on account)
Apr. 30	Cash	$1,600
	Accumulated Depreciation ($3,000 - $2,000)	$1,000
	Loss on sale of Equipment ($3,000 - $1,600 - $1,000)	$400
	Equipment		$3,000
	(To record the sale of equipment for cash_