Question

Jan. 1 Reggie and Hazel contribute $2,500 each to the company. Jan. 2 Paid January office rent of $6,500. Jan. 3 Paid $1,750 of the wages owed to their one employee, Hilda. Jan. 4 Reggie paid $1,500 for rent on his personal loft from his personal savings account. Jan. 5 Collect $2,200 from a customer's past due account. Jan. 10 Provide $8,000 of designing services for client -Mr. Rover who will pay by the end of the month. Jan. 11 Received customer's prepayment of $9,500 for design services to be provided on site next month. Jan. 12 Was interviewed by Architectural Digest for a piece that will run in March. This type of publicity will likely double the company's sales. Jan. 15 Paid Hilda her bi-weekly wages of $1,750. Jan. 20 Took out business loan from local bank for $5,000. Jan. 21 Provided design services to Dr. Rothenberg Optometry for $2,250 and received check upon completion of job same day. Paid $3,000 of the company's accounts payable balance. Jan. 23 Visited local gallery for appointment to view original artwork for the office space. Considering purchasing a piece priced at $15,000. The gallery offers 3% financing for local businesses. Jan. 25 Prepaid $2,000 for ad to run in the June issue of HG TV Magazine. Reggie & Hazel believe this ad will increase sales by 50%. Jan. 26 Received bill for January's utilities of $300 and will send payment next month. Received $2,000 from Mr. Rover for services provided on January 10. Jan. 30 Reggie and Hazel each take out $3,000 cash from the company. Paid Hilda her bi-weekly wages of $1,750. Jan. 22 Jan. 29 Jan. 31 Requirements: 1.) Prepare any necessary journal entries for January.

Answer 1

Journal entry is known as the book of original entry because, the transactions are made first from vouchers to journals. It will record the two accounts in a transaction in terms of debit and credit. Any increase in assets and expenses/losses is debited and any decrease is credited. Any increase in liabilities and incomes/gains is credited and any decrease is debited.

Journal entries:

Credit Debit 5,000 Date Account titles and Explanation Jan 1 Cash Reggie, Capital Bezel, Capital (To record capital contribution) 2,500 2,500 6,500 Jan 2 Rent expense Cash (To record payment of office rent for January) 6,500 1,750 Jan 3 Wages payable Cash (To record payment of wages owed) 1,750 2,200 Jan 5 Cash Accounts receivable (Yo record collection of dues from a customer) 2,200 8,000 Jan 10 Accounts receivable Service revenue (To record service revenue earned) 8,000 9,500 9,500 Jan 11 Cash Unearned revenue (To record prepayment for service to be provided) 1,750 Jan 15 Wages expenses Cash (To record payment of wages) 1,750 5,000 Jan 20 Cash Bank loan (To record business loan taken) 5,000 2,250 2,250 Jan 21 Cash Service revenue (To record service revenue earned and check received) 3,000 Jan 22 Accounts payable Cash (To record payment for accounts payable) 3,000 2,000 Jan 25 Prepaid advertisement expense Cash (To record prepayment for ad to run in June) 2,000 300 Jan 26 Utilities expense Utilities payable (To record utilities payable) 300 2,000 2,000 Jan 29 Cash Accounts receivable (To record receipt of cash for service provided on January 10) Jan 30 Reggie, Withdrawals Bezel, Withdrawals 3,000 3,000 Cash 6,000 (To record withdrawal of cash) 1,750 Jan 31 Wages expenses Cash (To record payment of wages) 1,750

Jan 4 - No entry. Payment of rent on personal loft from personal account will not be considered as business transaction.

Jan 12 - No entry because no transaction has taken place.
Jan 23 - No entry because no transaction has taken place.