Question

The following transactions are February activities of Swing Hard Incorporated, which offers indoor golfing lessons in the northeastern United States a. Swing Hard paid $6,000 to its golf instructors for the month of February b. Swing Hard paid $3,200 for electricity used in the month of January c. Swing Hard received an electricity bill for $1,300 for the month of February, to be paid in March Prepare journal entries to record the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 2 Record the payment of $6,000 to its golf instructors for the month of February

Answer 1

Transaction	General journal	Debit	Credit
a	Salaries and wages expense	$6,000
	Cash		$6,000
	(To record payment to golf insructors)
b	Accounts payable/utilities payable	$3,200
	Cash		$3,200
	(to record payment for electricity)
c	Electricity expense	$1,300
	Accounts payable/utilites payable		$1,300
	(to record accrual of electricity expense)

Explanation:

a. Amount paid is a salary expense to the company so it shall be debited, and since it is paid in cash and the cash balance goes down and so it shall be credited by $6,000.

b. Electricity is an utility expense, therefore, it is debited, and since it is paid in cash and the cash balance goes down and so it shall be credited by $3,200.

c. Electricity bill is an expense therefore, it shall be debited but since it is not paid immidiately, it shall be accounted as a liability i.e. accounts payable.