Question

Required information CC3-1 Accounting for Business Operations (LO 3-2, LO 3-3, LO 3-5) (The following information applies to the questions displayed below) Starting in May, Nicole has decided that she has everything she needs to open her doors to customers. To keep up with competition, Nicole has added gift certificates and has started to advertise her company more to keep her business going in the long term. Here is a sample of some transactions that occurred in the month of May at Nicole's Getaway Spa (NGS).. May 1 Paid $2,750 cash for an insurance policy that covers the period from June 1 until May 31 next year. May 4 Ordered five new massage tables from Spa Supplies Unlimited for $225 each for future delivery. May 7 Provided $775 of spa services to customers on account. May 10 Received spa supplies purchased for $820 on account to use at Nicole's Getaway Spa. May 13 Received a bill for $40 for running an advertisement in the newspaper in May. The bill was paid in cash. May 16 Paid one-quarter of the amount owed from May 10. May 19 Customers paid $1,450 cash for NGS gift cards. No gift cards have been used. May 20 Obtained financing from the bank by signing a $5,200 two-year note payable. The $5,200 cash was deposited in NGS's bank account May 22 Received two of the massage tables ordered on May 4 and paid for the two tables in cash. May 25 Paid $450 cash for utility bills for services received and billed in May CC3-1 Part 1 Required: 1. For each of the transactions, prepare journal entries, using the date of the transaction as the reference. (if no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Required: Journal entries

Date	General Journal	Debit	Credit
May 01	Prepaid insurance	$2,750
	Cash		$2,750
May 04	No journal entry needed	-	-
May 07	Account receivable	$775
	Service revenue		$775
May 10	Supplies	$820
	Account payable		$820
May 13	Advertising expenses	$40
	Cash		$40
May 16	Account payable	$205
	Cash (820 * 1/4)		$205
May 19	Cash	$1,450
	Unearned service revenue		$1,450
May 20	Cash	$5,200
	Notes payable		$5,200
May 22	Equipment (225 * $2)	$450
	Cash		$450
May 25	Utility expenses	$450
	Cash		$450