Question

Transaction Analysis Grace Stewart began the Stewart Answering Service in December. The firm provides services for professional people and is currently operating with leased equipment On January 1, the assets and liabilities of the business were: Cash 56.400 Accounts Receivable 5.900 Accounts Payable 1600 Notes Payable 1500 Common Stock 10.200 Retained Earnings 0 The following transactions occurred during the month of January 1 Paidrer on office and equipment for January, 1.300 2 Collected $6.000 on account from dients 3 Borrowed 3.000 from a bank and shed a note payable for that amount 4 Beddents for work performed on a $12.500 5 Pad 1400 payable 6 Received invoice for any avertising 5800 7 Paid january salanes, 53.200. Padaytis 5430 Pald stockholders a dividend of 53,600 cash 10 Purchased apie Lonary or business, $1400 11 Paid 30 tobankas january on the outstanding note payable 6:41 PM

Answer 1

Since the transaction analysis heading, journal entries are prepared for the given transactions:

No.	Account Titles and Explanation	Debit	Credit
1)	Rent Expense	$1,800
	Cash		$1,800
	(To record the payment of rent)
2)	Cash	$6,000
	Accounts Receivable		$6,000
	(To record the amount collected on account from clients)
3)	Cash	$3,000
	Note Payable		$3,000
	(To record the amount borrowed by issuing a note)
4)	Accounts Receivable	$12,500
	Service Revenue		$12,500
	(To record the services provided on account)
5)	Accounts Payable	$1,400
	Cash		$1,400
	(To record payment on accounts payable)
6)	Advertising Expense	$800
	Advertising Payable		$800
	(To record the advertising expense)
7)	Salaries Expense	$3,200
	Cash		$3,200
	(To record the payment of salaries)
8)	Utilities Expense	$430
	Cash		$430
	(To record the payment of utilities expense)
9)	Dividends	$3,600
	Cash		$3,600
	(To record the payment of dividends)
10)	Printer	$1,400
	Cash		$1,400
	(To record the purchase of printer)
11)	Interest Expense	$30
	Cash		$30
	(To record the payment of interest on note)