Question

Engli No Marks for Values Elena Duvis is the owner of Island Services. The following transactions need to be recorded for her business. Aug 1 Prepaid $3,360 of insurance for one year. Aug 2 Prepaid $3,000 of rent for three months, Aug 3 Received a maintenance bill for $510 which will be paid next month. Aug 4 Received $2,860 cash for services provided. Aug 7 Took out a loan from the bank for $8,000 Aug 10 Paid telephone expenses for the month with $260 cash. Aug 12 Paid $440 cash to reduce the balance of accounts payable. Aug 31 Paid $10 of interest on the bank loan Aug 31 Adjusted prepaid insurance for one month for $280. Aug 31 Depreciated equipment for $250. Aug 31 Adjusted prepaid rent for one month for $1,000, Required Journalize the transactions for Island Services, Do not enter dollar signs or commas in the input boxes NOTE: Marks are only assigned to the account drop down boxes

Answer 1

Date Account titles and Explanation 1-Aug Insurance Cash (To record insurance paid) Debit in $ Credit in $ 3,360 3,360 3,000 2-Aug Rent Cash (To record Rent paid) 3,000 510 3-Aug Maintenance expense Accounts payable (To record maintenance expense) 510 2,860 4-Aug Cash Sale of services (To record Cash received for services provided) 2,860 8,000 7-Aug Cash Bank loan To record loan borrowed) 8,000 260 10-Aug Telephone expenses Cash (To record telephone expenses paid) 260 440 12-Aug Accounts payable Cash (To record amount paid to accounts payable) 440

LO 31-Aug Interest expense Cash (To record interest on loan paid) 10 3,080 31-Aug Prepaid insurance Insurance (To Adjust prepaid insurance) 3,080 250 31-Aug Depreciation expense Accumulated depreciation (To record depreciation expense) 250 1,000 31-Aug Prepaid rent Rent (To adjust prepaid rent) 1,000