Question

PROBLEM 1 – CHAPTER 2 (JOURNALIZE BUSINESS TRANSACTIONS)

Journalize each transaction for C. Cide Company for the month of January.  You may omit journal explanations.

Jan.   2          Invested $20,000 cash in business.

         3          Purchased an automobile for $4,000 cash for use in business.

         5           Paid $1,000 for a one-year insurance policy.

         9          Paid salaries to employees for $2,500

         10        Purchased supplies on account for $500.

         11        Billed customers $1,800 for services performed.

         16        Paid $200 cash for advertising.

         20        Received $700 cash from customers billed on January 11.

         23        Paid creditor $300 cash on balance owed.

         28        Received $2,000 cash for a service that will be performed during next month.

Answer 1

Ans:

Date	Account title and explanation	Ref.no	Debit	Credit
Jan-02	Cash		$ 20,000
	Common Stock			$ 20,000
	(To record issue of ordinary shares)
Jan-03	Automobile		$ 4,000
	Cash			$ 4,000
	(To record purchase of Automobile on cash)
Jan-05	Insurance Policy		$ 1,000
	Cash			$ 1,000
	(To record amount paid for insurance policy)
Jan-09	Salaries		$ 2,500
	Cash			$ 2,500
	(To record payment of salaries to employees)
Jan-10	Supplies on hand		$ 500
	Accounts payables			$ 500
	(To record purchase of supplies on account)
Jan-11	Accounts Receivable-Debtors		$ 1,800
	Service revenue			$ 1,800
	(To record amount received for services performed)
Jan-16	Advertising Expenses		$ 200
	Cash			$ 200
	(To record Avertising expenses paid)
Jan-20	Cash		$ 700
	Accounts receivables			$ 700
	(To record receipt of cash from accounts)
Jan-23	Accounts payables-Creditor		$ 300
	Cash			$ 300
	(To record amount Paid to Creditor)
Jan-28	Cash		$ 2,000
	Unearned Service revenue			$ 2,000
	(To record amount received for services to be performed in the next month)