Question

5. Larry Matt completed these transactions during December of the current year: Dec. 1 Began a financial services practice by investing $15,000 cash and office equipment with a $5,000 value. 2 Purchased $1,200 of office equipment on credit. 3 Purchased $300 of office supplies on credit. Completed work for a client and immediately received payment of 4 $900 cash. 8 Completed work for Precept Paper Co. on credit, $1,700. 10 Paid for the supplies purchased on credit on December 3. 14 Paid for the annual $960 premium on an insurance policy. 18 Received payment in full from Precept Paper Co. for the work completed on December 8. 27 Larry withdrew $650 cash from the business to pay personal expenses. 30 Paid $175 cash for the December utility bills. Received $2,000 in advance from a client for services to be 30 performed next year. Prepare general journal entries to record these transactions

Answer 1

JOURNAL ENTRIES

Date	Particulars	L.F	Dr Amount	Cr Amount
December
1	Cash a/c		15000
	Office equipment a/c		5000
	To capital a/c			20000
	(started business with 15000 cash and 5000 of equipment
2	Office equipments a/c		1200
	To creditors a/c			1200
	( Bought office equipments worth 1200 on credit )
3	Office supplies a/c		300
	To creditors			300
	( bought office supplies worth 500 on creedit )
4	Cash a/c		900
	To sales a/c			900
	( Cash payment received for service provided )
8	Precept paper co. a/c		1700
	To sales a/c			1700
	( services provided to precept paper co on credit basis )
10	Creditors a/c		300
	To Cash a/c			300
	( Paid cash to creditors for office supplies bought on 3rd december )
14	Insurance Premium expense A/c		960
	To cash a/c			960
	( Paid insurance premium )
18	Cash a/c		1700
	To Precept Paper co. a/c			1700
	( Received payment for the services provided on 8th december )
27	Drawings a/c		650
	To Cash a/c			650
	( Withdrew cash for personal use )
30	Utility Bill expenses a/c		175
	To Cash a/c			175
	( Paid utility bills for month of december )
30	Cash a/c		2000
	To Customer advance a/c			2000
	( received advance from clients )
30	Capital a/c		650
	To drawings a/c			650
	(Transferring the effect of drawings on Capital a/c )
	Total		30535	30535