Question

1. Journalizing Transactions

   Remington Communications has been providing cellular phone service for several years. During November and December, the following transactions occurred:

   Nov.	2	Remington received $3,000 for November phone service from Enrico Company.
   	6	Remington purchased $5,750 of supplies from Technology Associates on account.
   	10	Remington paid $4,250 to its hourly employees for their weekly wages.
   	15	Remington paid $5,750 to Technology Associates in full settlement of its account payable.
   	28	Remington paid $1,750 for utilities used during November.
   	30	Remington received a bill from Monticello Construction for $1,430 for repairs made to Remington's loading dock on November 15. Remington plans to pay the bill in early December.
   Dec.	10	Remington paid $1,430 to Monticello Construction to settle the repair bill received on November 30.

   Required:

   1. Prepare a journal entry for each of the above transactions.

   Nov. 2	Accounts Payable Accounts Receivable Cash Inventory Service Revenue
   	Accounts Payable Accounts Receivable Cash Inventory Service Revenue
   	(Record revenue earned)
   6	Accounts Payable Accounts Receivable Cash Supplies Supplies Expense
   	Accounts Payable Accounts Receivable Cash Supplies Supplies Expense
   	(Record purchase of supplies on account)
   10	Accounts Payable Accounts Receivable Cash Wages Expense Wages Payable
   	Accounts Payable Accounts Receivable Cash Wages Expense Wages Payable
   	(Record payment of wages)
   15	Accounts Payable Accounts Receivable Cash Inventory Service Revenue
   	Accounts Payable Accounts Receivable Cash Inventory Service Revenue
   	(Record payment on account)
   28	Accounts Payable Accounts Receivable Cash Utilities Expense Utilities Payable
   	Accounts Payable Accounts Receivable Cash Utilities Expense Utilities Payable
   	(Record use of utilities)
   30	Accounts Payable Accounts Receivable Cash Repairs and Maintenance Expense Repairs and Maintenance Payable
   	Accounts Payable Accounts Receivable Cash Repairs and Maintenance Expense Repairs and Maintenance Payable Wages Expense
   	(Record repairs performed on account)
   Dec. 10	Accounts Payable Accounts Receivable Cash Service Revenue Supplies
   	Accounts Payable Accounts Receivable Cash Service Revenue Supplies
   	(To record payment on account)

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   2. Conceptual Connection: What accounting principle did you apply in recording the November 10 transaction?
   

   • Conservatism principle
   • Expense recognition principle
   • Historical cost principle
   • Revenue recognition principle

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Answer 1

Requirement 1:

Date	Account title and Explanation	Debit	Credit
Nov.2	Cash	$3,000
	Service revenue		$3,000
	[To record revenue earned]
Nov.6	Supplies	$5,750
	Accounts payable		$5,750
	[To record purchase of supplies on account]
Nov. 10	Wages expense	$4,250
	Wages payable		$4,250
	[To record payment of wages]
Nov. 15	Accounts payable	$5,750
	Cash		$5,750
	[To record payment on account]
Nov.28	Utilities expense	$1,750
	Cash		$1,750
	[To record use of utilities]
Nov. 30	Repairs and Maintenance Expense	$1,430
	Repairs and Maintenance Payable		$1,430
	[To record repairs performed on account]
Dec. 10	Repairs and Maintenance Payable	$1,430
	Cash		$1,430
	[To record payment on account]

Requirement 2:

Answer: Expense recognition principle

Wages Expenses recorded as per 'Expenses recognition principle'.