Question

Using the T accounts below, record the following transactions. Label each entry with the appropriate letter.

a. The stockholders contributed cash of $40,000 and a truck worth $48,000 into the business in exchange for 8,800 shares of $10 par value stock.

b. Paid two months' rent in advance, $2,400.

c. Agreed to do a hauling job for a price of $6,400.

d. Performed the hauling job. Will get paid later.

e. Received payment of $2,000 on the hauling job.

f. Purchased gasoline on credit, $40.

There are t-accounts for the following:

-Cash (three entries)

-Accounts Payable (one entry)

-Accounts Receivable (two entries)

-Common Stock (one entry)

-Prepaid rent (one entry)

-Hauling revenue (one entry)

-Truck (one entry)

-Gasoline expense (one entry)

Answer 1

Solution:

Cash Account
S. No	Particulars	Debit	S. No	Particulars	Credit
a	To common stock	$40,000.00	b	By Prepaid Rent	$2,400.00
e	To Accounts receivables	$2,000.00

Accounts Payable
S. No	Particulars	Debit	S. No	Particulars	Credit
			f	By Gasoline expense	$40.00

Accounts Receivables
S. No	Particulars	Debit	S. No	Particulars	Credit
d	To Hauling Revenue	$6,400.00	e	By Cash	$2,000.00

Common Stock
S. No	Particulars	Debit	S. No	Particulars	Credit
			a	By Cash	$40,000.00
			a	By Truck	$48,000.00

Prepaid Rent
S. No	Particulars	Debit	S. No	Particulars	Credit
b	To Cash	$2,400.00

Hauling Revenue
S. No	Particulars	Debit	S. No	Particulars	Credit
			d	By Accounts Receivables	$6,400.00

Truck
S. No	Particulars	Debit	S. No	Particulars	Credit
a	To Common Stock	$48,000.00

Gasoline Expense
S. No	Particulars	Debit	S. No	Particulars	Credit
f	To Accounts payable	$40.00