Question

2A-3. (Similar to problem 2A-1) Show the T-account entries for each of the following transactions: Investors purchase common stock in a corporation for $46,000. The purchase of supplies for $880. Providing services for $32,000 cash. Providing services for $36,000 on account. Payment of employee salaries in the amount of $16,000 cash. Purchased land for $33,000. The company paid a $14,000 down payment and signed a note for the remaining $19,000. Purchase of an advertisement for $1,400 cash Collection of $26,000 of the amoun provided in d. a. b. c. d. e. f. 8. h. t due as a result of the services i. Declaration and payment of a dividend of $17,000.

Answer 1

a. Investors purchase common stock in a corporation for $46000

In the books of the corporation, journal entry

Cash ac Dr. 46000

To Common stock 46000

Cash Account

	$		$
To Common stock	46000	----

Common stock account

	$		$
--------		By cash account	46000

Note: in the books of the investor, the "investment (common stock of xxx corp)account" will be debited and "cash account"will be credited.

b. Purchase of supplies

Supplies on hand account Dr. 880

To Accounts payable. 880

Supplies on hand account

	$		$
To Accounts payable	880	----

Accounts payable account

	$		$
----		By supplies on hand	880

c. Providing services for cash

Cash account. Dr 32000

To Service revenue account. 32000

Cash account

	$		$
To Service revenue	32000	---

Service revenue account

	$		$
-----		By cash	32000

d. Providing services on account

Accounts receivable. Dr 36000

To Service revenue account . 36000

Accounts receivable account

	$		$
To Service revenue	36000	-----

Service revenue account

	$		$
-----		By accounts receivable	36000

e. Payment of employee salaries by cash

Salaries account. Dr. 16000

To Cash account . 16000

Salaries account

	$		$
To Cash	16000	----

Cash account

	$		$
---		By salaries	16000

f. Purchase of land partially for cash and by signing a note.

Land account. Dr . 33000

To Cash account. 14000

To Notes payable . 19000

Land account

	$		$
To Cash	14000	----
To Notes payable	19000

Cash account

	$		$
-----		By land	14000

Notes payable account

	$		$
---------		By land account	19000

g. Purchase of an advertisement

Advertisement account. Dr. 1400

To Cash account . 1400

Advertisement account

	$		$
To Cash account	1400	-----

Cash account

	$		$
--------		By advertisement account	1400

h. Collection of amount due for services rendered in d.

Cash account . Dr. 26000

To Accounts receivable . 26000

Cash account

	$		$
To Accounts receivable	26000	--------------

Accounts receivable account

	$		$
------		By cash	26000

i. Declaration and payment of dividend

Retained earnings . Dr . 17000

To Dividend payable . 17000

(Declaration of dividend)

Dividends payable . Dr. 17000

To Cash . 17000

(Declared dividends paid on the same date)

Retained earnings account

	$		$
To Dividend payable	17000	-------

Dividend payable account

	$		$
To Cash	17000	By retained earnings	17000

Cash account

	$		$
-------		By dividend payable	17000

Note: the t accounts have been prepared from the perspective of the company (in the books of the company). Journal entries have been provided for clarity.