Question

Prepare journal entries for the transactions below.

A company entered into the following transactions during April. This is the first month of their operation.

1. April 1^st: Signed a lease and made a payment of $4,500 to the landlord comprised of three month’s rent covering April, May, and June.
2. April 3^rd: Purchased equipment on account for $35,000.
3. April 4^th: Purchased supplies for $2,000, paid with cash.
4. April 10^th: Performed services and sent a bill of $57,000 to a customer.
5. April 15^th: Received a payment of $24,000 for services to be performed in May.
6. April 20^th: Collected $14,000 from the customer billed on April 10^th.
7. April 21^st: Made a $15,000 payment on account for equipment that was purchased on April 3^rd.
8. April 30^th: Received bills for the current month from telephone and electricity companies totaling $380; payments will be made next month.
9. April 30^th: Paid employees $11,000 for work done during the month.

J.    April 30^th: Physical count of supplies shows the supplies bought on April 4^th only have $400 worth left.

K. April 30^th: Adjusted the rent expense (see transaction A).

Answer 1

Journal

	Date	Account Title and Explanation	Debit	Credit
A	APril 1	Prepaid rent	4,500
		Cash		4,500
B	APril 3	Equipment	35,000
		Accounts payable		35,000
C	APril 4	Supplies	2,000
		Cash		2,000
D	APril 10	Accounts receivable	57,000
		Service revenue		57,000
E	APril 15	Cash	24,000
		Unearned service revenue		24,000
F	APril 20	Cash	14,000
		Accounts receivable		14,000
G	APril 21	Accounts payable	15,000
		Cash		15,000
H	APril 30	Utilities expense	380
		Utilities payable		380
I	APril 30	salaries expense	11,000
		Cash		11,000
J	APril 30	Supplies expense	1,600
		Supplies		1,600
K	APril 30	Rent expense	1,500
		Prepaid rent		1,500

Supplies purchased = $2,000

Ending supplies = $400

Supplies expense =  Supplies purchased - Ending supplies

= 2,000 - 400

= $1,600

Rent expense for 3 months = $4,500

Rent expense for 1 month = 4,500 x 1/3

= $1,500