Question

Journal entry worksheet 1 2 3 4 5 6 7 8 9 > Borrowed $725,000 from the bank on December 1, signing a note payable, due in six months. Record the transaction. Note: Enter debits before credits. Transaction General Journal Debit Credit View general journal Clementy Record entry

Answer 1

Solution:-

Requirement (1) :-

Journal entries

Date	Particulars	Debit	Credit
a.	Cash	$ 725,000
	Notes payable (short term)		$ 725,000
b.	Equipment	$ 42,000
	Cash		$ 42,000
c.	Supplies	$ 14,000	$ 14,000
	Accounts payable
d.	Repairs and maintainance	$ 23,900
	Cash		$ 23,900
e.	Cash	$ 87,000
	Unearned revenue		$ 87,000
f.	Cash	$ 81,800
	Service revenue		$ 81,800
g.	Cash	$ 425
	Unearned revenue		$ 425
h.	Accounts payable {14000/2}	$ 7,000
	Cash		$ 7,000
I.	Salaries and wages expense	$ 27,500
	Cash		$ 27,500

Requirement (2):-

Computation of company's preliminary net income:-

Revenue - service revenue	$ 81,800
Less expense :- Repairs and maintainance	$ 23,900
Less expense :- salaries and wages	$ 27,500
Net Income	$ 30,400