Question

Problem 4-BA The following accounting items were found in the journal of Wildhorse Company: 1. 2. 3. 4. S. 6. 7. 8. The payment of the current month's rent for $590 was recorded as a debit to Interest Payable and a credit to Cash, both for $590. (Note: This had not been previously accrued.) The collection of an account receivable for $480 was debited to Cash and credited to Service Revenue, both for $480. A payment for Utilities Expense of $230 was recorded as a debit to Utilities Expense and a credit to Cash, both for $320. A customer was billed $950 for services provided on account. Accounts Receivable was debited and Uneamed Revenue was credited, both for $950. A $600 accrual of Interest Revenue was recorded as a debit to Interest Expense and a credit to Interest Receivable, both for $600. A payment of a $210 account payable was recorded as a debit to Accounts Payable and a credit to Cash, both for $210. A $320 advance from a customer was recorded as a debit to Cash and a credit to Service Revenue, both for $320. The purchase of $1,900 of equipment on account was recorded as a debit to Repair Expense and a credit to Accounts Payable, both for $1,900. Correct any error by reversing the incorrect entry and then recording the correct entry. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Credit Account Titles and Explanation 1. Reverse incorrect entry: Correct entry: 2. Reverse incorrect entry

Answer 1

Wildhorse Company
Journal Entries
	Date	Account's tittle	Debit $	Credit $
1	Reverse incorrect entry;
	1)	Cash	590
		Interest Payable		590
	2)	Service Revenue	480
		Cash		480
	3)	Cash	320
		Utility Expense		320
	4)	Unearned Revenue	950
		Accounts Receivable		950
	5)	Interest Receivable	600
		Interest Expense		600
	6)	The entry for payment of accounts payable by debit accounts payable and credit cash , both for $ 210 is a correct journal entry. Therefore, no need to reverse.
	7)	Service Revenue	320
		Cash		320
	8)	Accounts Payable	1,900
		Repair Expense		1,900
2	Correct journal entry;
	1)	Rent Expense	590
		Cash		590
	2)	Cash	480
		Accounts Receivable		480
	3)	Utilities Expense	230
		Cash		230
	4)	Accounts Receivable	950
		Service Revenue		950
	5)	Interest Receivable	600
		Interest Revenue		600
	6)	Original journal entry is true and correct.
	7)	Cash	320
		Unearned Revenue		320
	8)	Equipment	1900
		Accounts Payable		1900