Question

Prepare journal entries for the transactions below. A company entered into the following transactions during April....

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

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

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

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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

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