Question

Problem 2-03A a-c Maquaketa Services was formed on May 1, 2020. The following transactions took place during the first month. Transactions on May 1: 1. Jay Bradford Invested $40,000 cash in the company, as its sole owner. 2. Hired two employees to work in the warehouse. They will each be paid a salary of $3,050 per month. 3. Signed a 2-year rental agreement on a warehouse; paid $24,000 cash in advance for the first year. 4. Purchased furniture and equipment costing $30,000. A cash payment of $10,000 was made immediately, the remainder will be paid in 6 months. S. Pald $1,800 cash for a one-year Insurance policy on the furniture and equipment. Transactions during the remainder of the month: S. Purchased basic office supplies for $420 cash. 7. Purchased more office supplies for $1,500 on account. 8. Total revenues earned were $20,000-$8,000 cash and $12,000 on account. 9. Pald $400 to suppliers for accounts payable due 10. Received $3,000 from customers in payment of accounts receivable 11. Received utility bills in the amount of $380, to be paid next month. 12. Paid the monthly salaries of the two employees, totaling 56,100.

Answer 1

Answer:

Transaction	Account title and Explanation	Debit	Credit
1	Cash	$40,000
	Jay BradFord, Capital		$40,000
	[To record investment in business]
2	No Entry
3	Prepaid rent	$24,000
	Cash		$24,000
	[To record Payment rent paid in advance]
4	Furniture and Equipment	$30,000
	Cash		$10,000
	Accounts payable		$20,000
	[To record purchase of furniture and equipment]
5	Prepaid insurance	$1,800
	Cash		$1,800
	[To record payment of insurance]
6	Office supplies	$420
	Cash		$420
	[To record purchase of office supplies]
7	Office supplies	$1,500
	Accounts payable		$1,500
	[To record purchase of office supplies on account]
8	Cash	$8,000
	Accounts receivable	$12,000
	Service Revenue		$20,000
	[To record revenues]
9	Accounts payable	$400
	Cash		$400
	[To record cash paid for accounts payable]
10	Cash	$3,000
	Accounts receivable		$3,000
	[To record collections from customers]
11	Utilities expense	$380
	Utilities payable		$380
	[To record accrued utilities expense]
12	Salaries expense	$6,100
	Cash		$6,100
	[To record payment of salaries]