Question

Preparing Journal Entries and Posting
B. Fischer started Fischer Company, a cleaning services firm, on April 1.

April 1 B. Fischer invested $5,400 cash to begin the business in exchange for common stock.
April 2 Paid $1,710 cash for six months’ lease on a van for the business.
April 3 Borrowed $6,000 cash from a bank and signed a note payable, agreeing to repay it in one year plus 10% interest.
April 4 Purchased $3,300 in cleaning equipment; the company paid $1,500 cash with the remainder due within 30 days.
April 5 Paid $2,580 cash for cleaning supplies.
April 7 Paid $210 cash for advertisements to run in the area newspaper during April.
April 21 Billed customers $2,100 for services performed.
April 23 Paid $1,800 cash toward the account for cleaning equipment (see April 4).
April 28 Collected $1,380 cash from customers on their accounts billed on April 21.
April 29 Paid $600 cash for dividends.
April 30 (a) Paid $1,650 cash for April wages.
April 30 (b) Paid $597 cash for gasoline used during April.

a. Prepare a journal entry for each transaction.

Note: List any multiple debits or any multiple credits in alphabetical order by account name.

Note: List any multiple debits or any Ultiple credits in alph by account name. Account Debit Credit April 1 0 0 0 0 Owner invested cash for stock April 2 0 0 0 0 Paid six months' lease on van April 3 0 0 0 0 Borrowed money from bank April 4 0 O O O 0 0 Purchase of equipment 0 April 5 0 0 0 0 Purchase of supplies April 7 0 0 0 0 Payment for advertising April 21 0 0 0 0 Billed customers for services April 23 0 0 0 0 Payment on account April 28 0 0 0 0 Collections from customers on account April 29 0 0 O 0 Paid cash dividends April 30 (a) 0 0 0 0 Payment of wages April 30 (6) 0 0 0 0 Payment for gasoline

Answer 1

Solution:

Date	Particulars	Debit	Credit
01-Apr	Cash A/c	$ 5,400
	To Common Stock A/c		$ 5,400
	(To record Owner Purchased Common Stock for Cash)
02-Apr	Prepaid Van Lease A/c	$ 1,710
	T0 Cash A/c		$ 1,710
	(TO Record Payment of Lease on Van)
03-Apr	Cash A/c	$ 6,000
	To Notes Payable A/c		$ 6,000
	(To Record Money Borrowed from bank for one year, Interest @ 10% )
04-Apr	Equipment A/c	$ 3,300
	Cash A/c		$ 1,500
	Accounts Payable A/c		$ 1,800
	(To Record Purchased Equipment Made Down payment with balance due in 30 days)
05-Apr	Supplies A/c	$ 2,580
	To Cash A/c		2580
	(To Record Purchase of Supplies for Cash)
07-Apr	Advertising Expenses A/c	$    210
	To Cash A/c		$    210
	(To Record Payment for Advertisement)
21-Apr	Accounts Receivable A/c	$ 2,100
	To Cleaning Fees Earned A/c		$ 2,100
	(To Record Amount Received from Billed Customers For Services)
23-Apr	Accounts Payable A/c	$ 1,800
	To Cash A/c		$ 1,800
	(To Record Payment on Account)
28-Apr	Cash A/c	$ 1,380
	To Accounts Receivable A/c		$ 1,380
	(To record Collections from Customers)
29-Apr	Dividends A/c	$    600
	To Cash A/c		$    600
	(To Record Payment of Dividend)
30-Apr	Wages Expensea A/c	$ 1,650
	To Cash A/c		$ 1,650
	(To Record Payment of Wages)
30-Apr	Fuel Expenses A/c	$    597
	To Cash A/c		$    597
	(To Record of Pament for Gasoline used in April)

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