Question

On April 1. Larkspur, Inc. began operations. The following transactions were completed during the month. 1. Issued common stock for $23,500 cash. 2. Obtained a bank loan for $6,900 by issuing a note payable. 3. Paid $10,800 cash to buy equipment 4. Paid $1,200 cash for April office rent. 5. Paid $1,400 for supplies. 6. Purchased $590 of advertising in the Daily Herald, on account. 7. Performed services for $17,600: cash of $1,960 was received from customers, and the balance of $15,640 was billed to customers on account 8. Paid $390 cash dividend to stockholders. 9. Paid the utility bill for the month $1,960, 10 Paid Daily Herald the amount due in transaction (6), 11 Paid $40 of interest on the bank loan obtained in transaction (2). 12 Paid employees' salaries, $6,270. 13 Received $11,760 cash from customers billed in transaction (7). 14. Paid income tax, $1,470 Journalize the transactions. (If no entry is required, select "No Entry for the account titles and enter for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually)

Answer 1

Transaction	General Journal	Debit	Credit
1	Cash	$23,500
	Common stock		$23,500
	( To record investment by owner)
2	Cash	$6,900
	Note payable		$6,900
	( To record issuance of note)
3	Equipment	$10,800
	Cash		$10,800
	( To record purchase of equipment)
4	Rent expense	$1,200
	Cash		$1,200
	( To record rent expense)
5	Supplies	$1,400
	Cash		$1,400
	( To record purchase of supplies)
6	Advertising expense	$590
	Accounts payable - Daily Herald		$590
	( To record advertising expense)
7	Cash	$1,960
	Accounts receivable	$15,640
	Service revenue		$17,600
	( To record service revenue)
8	Dividends	$390
	Cash		$390
	( To record dividends payment)
9	Utility expense	$1,960
	Cash		$1,960
	( To record utility expense)
10	Accounts payable - Daily Herald	$590
	Cash		$590
	( To record payment to creditors)
11	Interest expense	$40
	Cash		$40
	( To record interest expense)
12	Salaries expense	$6,270
	Cash		$6,270
	( To record salaries expense)
13	Cash	$11,760
	Accounts receivable		$11,760
	( To record amount received from customers)
14	Income tax expense	$1,470
	Cash		$1,470
	( To record income tax expense)

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