Question

Monroe Company rents and sells electronic equipment. During September, Monroe engaged in the transactions described below.

Sept. 5		Purchased a Chevrolet truck for $42,500 cash.
8		Purchased inventory for $4,400 on account.
10		Purchased $950 of office supplies on credit.
11		Rented sound equipment to a traveling stage play for $12,800. The producer of the play paid for the service at the time it was provided.
12		Rented sound equipment and lights to a local student organization for a school dance for $2,800. The student organization will pay for services within 30 days.
18		Paid employee wages of $4,170 that have been earned during September.
22		Collected the receivable from the September 12 transaction.
23		Borrowed $14,100 cash from a bank on a 3-year note payable.
28		Issued common stock to new stockholders for $40,000.
30		Paid a $4,350 cash dividend to stockholders. Required: Prepare a journal entry for each transaction.

Answer 1

Solution:

Journal Entries - Monroe Company
Date	Particulars	Debit	Credit
5-Sep	Truck Dr	$42,500.00
	To Cash		$42,500.00
	(To record purchase of truck)
8-Sep	Inventory Dr	$4,400.00
	To Accounts Payable		$4,400.00
	(To record purchase of inventory on account)
10-Sep	Office Supplies Dr	$950.00
	To Accounts Payable		$950.00
	(To record purchase of office supplies on account)
11-Sep	Cash Dr	$12,800.00
	To Rent Revenue		$12,800.00
	(To record revenue from renting of sound equipment)
12-Sep	Accounts Receivables Dr	$2,800.00
	To Rent Revenue		$2,800.00
	(To record revenue from renting of sound equipment)
18-Sep	Salaries and Wage Expense Dr	$4,170.00
	To Cash		$4,170.00
	(To record payment of employee salary)
22-Sep	Cash Dr	$2,800.00
	To Accounts receivables		$2,800.00
	(To record collection of receivables)
23-Sep	Cash Dr	$14,100.00
	To Note Payable		$14,100.00
	(To record borrowing by issuing note)
28-Sep	Cash Dr	$40,000.00
	To Common Stock		$40,000.00
	(To record issue of shares)
30-Sep	Dividend Dr	$4,350.00
	To Cash		$4,350.00
	(To record payment of dividends)