Question

Diana Mark is the president of ServicePro, Inc., a company that provides temporary employees for not-for-profit companies. ServicePro has been operating for five years; its revenues are increasing with each passing year. You have been hired to help Diana in analyzing the following transactions for the first two weeks of April:

April		2		Purchased and received office supplies for $1,000 on account.
April		5		Billed the local United Way office $5,000 for temporary services provided.
April		8		Paid $350 for supplies purchased and recorded on account last period.
April		8		Placed an advertisement in the local paper for $900 cash.
April		9		Purchased new equipment for the office costing $3,300 cash.
April		10		Paid employee wages of $2,200 incurred in April.
April		11		Received $2,000 on account from the local United Way office billed on April 5.
April		12		Purchased land as the site of a future office for $15,000. The land value was appraised as $21,000. Paid $3,000 down and signed a long-term note payable for the balance.
April		13		Issued 1,900 additional shares of common stock for $30 per share in anticipation of building a new office.
April		14		Billed Family & Children's Services $3,000 for services rendered this month.
April		15		Received the April utilities bill for $800 to be paid next month.

Required:

For each of the transactions, prepare journal entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Journal Entries:

Credit Debit $1,000 Date Account title and Explanation Apr 2 Supplies Accounts payable [To record purchase of office supplies on account] $1,000 Apr 5 $5,000 Accounts receivable Service revenue [To record service revenue] $5,000 $350 Apr 8 Accounts payable Cash [To record cash paid for accounts payable] $350 $900 Apr 8 Advertising expense Cash [To record payment of advertising expense] $900 $3,300 Apr 9 Equipment Cash [To record purchase of equipment] $3,300 $2,200 Apr 10 Wages expense Cash [To record payment of wages] $2,200 $2,000 Apr 11 Cash Accounts receivable [To record collections from customers] $2,000 $15,000 Apr 12 Land Cash Notes payable [To record purchase of land] $3,000 $12,000 $57,000 Apr 13 Cash (1,900 x $30] Common stock [To record issuance of common stock] $57,000 $3,000 Apr 14 Accounts receivable Service revenue [To record services performed on account] $3,000 $800 Apr 15 Utilities expense Utilities payable [To record accrued utilities expense] $800