Question

Pharoah Ltd. has the following selected transactions: 1. 2. 3. 4. 5. Issued common shares to shareholders in exchange for $5,000. Paid rent in advance for two months, $2,400. Paid administrative assistant $400 salary. Billed clients $1.600 for services provided. Received $900 in partial payment from clients for services provided in item 4 above. Purchased $500 of supplies on account. Paid supplier amount owing on account, $500. Borrowed $1,000 cash from the bank. 6. 7. 8. Journalize the transactions for Pharoah Ltd. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

Answer 1

Record journal entry for each transaction as shown below:
Sr No	Account title and Explanation	Debit	Credit
1	Cash	$5,000
	Common stock		$5,000
	(To record common stock issued)
2	Prepaid rent	$2,400
	Cash		$2,400
	(To record rent paid in advance)
3	Salaries expense	$400
	Cash		$400
	(To record salary paid)
4	Accounts receivable	$1,600
	Service revenue		$1,600
	(To record service provided)
5	Cash	$900
	Accounts receivable		$900
	(To record cash collected from customer)
6	Supplies	$500
	Accounts payable		$500
	(To record supplies purchase on account)
7	Accounts payable	$500
	Cash		$500
	(To record cash paid to supplier)
8	Cash	$1,000
	Bank loan payable		$1,000
	(To record cash borrowed)