Question

7. Prepare journal entries for the following transactions. Assume a beginning Cash balance of $30,000. Prepare T-accounts and post the journal entries to the ledger. 1. Performed consulting services for a client in exchange for $3,200 cash. 2. Performed consulting services for a client on account, $1,700. 3. Paid $30,000 cash for land. 4. Purchased office supplies on account, $900. 5. Paid a $2,500 cash dividend to stockholders. 6. Paid $550 on account for supplies purchased in Transaction d. 7. Paid $800 cash for the current month's rent. 8. Collected $1,500 from client in Transaction b. 9. Stockholders invested $20,000 cash in the business. 10. Purchased a truck for $36,500. Paid $5,500 down and financed the balance.

Answer 1

Journal Entries:

Transaction	Account title and Explanation	Debit	Credit
1	Cash	$3,200
	Service revenue		$3,200
	[To record service revenue]
2	Accounts receivable	$1,700
	Service revenue		$1,700
	[To record services on account]
3	Land	$30,000
	Cash		$30,000
	[To record purchase of land]
4	Office supplies	$900
	Accounts payable		$900
	[To record purchased office supplies on account]
5	Cash dividends	$2,500
	Cash		$2,500
	[To record payment of cash dividends]
6	Accounts payable	$900
	Cash		$900
	[To record payment for accounts payable]
7	Rent expense	$800
	Cash		$800
	[To record rent expense]
8	Cash	$1,500
	Accounts receivable		$1,500
	[To record collections from customers]
9	Cash	$20,000
	Common stock		$20,000
	[To record stockholders investment]
10	Truck	$36,500
	Cash		$5,500
	Notes payable		$31,000
	[To record purchase of truck]

Ledger:

Cash
Beg. Bal.	$30,000	3	$30,000
1	$3,200	5	$2,500
8	$1,500	6	$900
9	$20,000	7	$800
		10	$5,500
Accounts receivable
2	$1,700	8	$1,500
Office supplies
4	$900
Land
3	$30,000
Truck
10	$36,500
Accounts payable
6	$900	4	$900
Notes payable
		10	$31,000
Cash dividends
5	$2,500
Common stock
		9	$20,000
Service revenue
		1	$3,200
		2	$1,700
Rent Expense
7	$800