Question

Journalize the following business transactions in general journal form. Identify each transaction by number.

1.		Andrew Bird invested $35,000 cash in exchange for stock.
2.		Hired an employee to be paid $400 per week, starting tomorrow.
3.		Paid two years’ rent in advance, $7,440.
4.		Paid the worker’s weekly wage.
5.		Recorded revenue earned and received for the week, $1,900.

(Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.	Account Titles and Explanation	Debit	Credit
1.
2.
3.
4.
5.

Answer 1

No.	Account Titles and Explanation	Debit	Credit
1	Cash	$ 35,000.00
	Common stock		$ 35,000.00
	(To record issuance of common stock)
2	No entry required
3	Prepaid rent	$    7,440.00
	Cash		$    7,440.00
	(To record payment of rent)
4	Wages expense	$        400.00
	Cash		$        400.00
	(To record payment of wages)
5	Cash	$    1,900.00
	Revenue		$    1,900.00
	(To record revenue earned)

Hiring of the employee is not an accounting transaction to be recorded.