Question

Prepare journal entries for the following transactions.

1. Paid 1 year rent in advance for $2,000.

2. Hired a worker to be paid $500 per week, starting next week.

3. Purchased equipment for $3,000. Paid $800 in cash, and the remainder to be financed at $500/week.

4. Paid a worker the first weeks wages.

5. Received a bill of $150 to be paid on the first of the current month.

6. Issued stock valued at $35,000.

7. Paid a dividend of $10,000.

8. Received two months of services fees in advance in the amount of $3,000.

9. Purchased a 4-year insurance policy for $1000.

10. Billed a customer for the services that were performed, $2,000.

Answer 1

the following are the journal entries:

sno	accounts	debit	credit
1	Advance rent a/c	$2,000
	.............To cash a/c		$2,000
2	no entry is entered on hiring of workers
3	Equipment a/c	3,000
	..............To cash a/c		800
	..............To accounts payable a/c		2,200
	(amount of accounts payable = 3,000 - 800 =>2,200)
4	Salaries and wages expense a/c	500
	..............To Cash a/c		500
5	Utilities expense a/c	150
	................To Utilities expense payable a/c		150
6	cash a/c	35,000
	............To Common stock a/c		35,000
7	dividends a/c	10,000
	..................To cash a/c		10,000
8	Cash a/c	3000
	................To service revenue a/c		3000
9	prepaid insurance a/c	1000
.	...............To cash a/c		1000
10	accounts receivable a/c	2,000
.	..............To service revenue a/c		2,000