Question

Need help breaking down these transactions and understanding what is debit and what is credit for these transactions.

• August 1 Pay the July accrued interest to the bank. Also make a $40,000 payment on the

bank note principal.

• August 5 Sunhurst Country Club, LLC paid its outstanding accrued July payroll of $7,000 plus

an additional $1,000 for salaries incurred between August 1 and August 5.

• August 7 Sunhurst Country Club, LLC paid the outstanding accounts payable at July 31, 2019.

Since no purchase discounts were available, the full amount owed was paid.

• Total Rental Fees for golf clubs, carts, etc collected in cash for the month were $24,500.

• Total Green Fee revenues collected in cash for the month were $211,000.

• The golf course had 25 more people sign up for Golf lessons beginning the first week of September. The cost remains $650 for six weeks of lessons.

• Golf course maintenance expenses for the month of August paid in cash were $127,500.

• Total Salary Expenses for the month of August was $12,000; of that amount $9,000 was paid during the month of August and the remaining $3,000 will be paid next month.

• Total Utility Expense (water, sewer, electrical) was paid in cash for $45,100.

• Accrue the interest for the month of August on the Note Payable. Since the note was paid down $40,000 on August 1st, the interest calculation is based on the new outstanding principal at the end of August. (To calculate the interest, use the new outstanding principal balance and calculate the new interest expense using the 6% interest rate. (Round calculation to the nearest dollar).

• Recognize the revenue earned from the lessons taught during August for the lessons paid for in July. Remember you collected golf lesson fees in July for lessons that began in August. (Four weeks of the July lessons were taught in August so recognize 4 weeks’ worth of revenue out of the 6 total weeks). Use the Golf Lesson Revenue account with this transaction.

• Sunhurst Country Club, LLC had additional golf course maintenance expenses of $13,500 at the end of August to be paid in September.

• Adjust Prepaid Insurance for the amount used in August.

1. Outstanding checks totaled $925

2. The bank had issued a $1,600 debit memo for three insufficient funds (NSF)

checks.

3. The bank statement enclosures included a debit memo for $35 that had been deducted from the Sunhurst Country Club, LLC account to pay for service charges. Record the $35 charge to Bank Service Charges in the general ledger.

4. The bank statement showed a check was written for $400. The check register

showed that Sunhurst Country Club, LLC had recorded the check as $40. It should have been recorded on Sunhurst Country Club, LLC’s books for $400. The check was written for utility expenses.

5. Deposits in transit were $1,450.

Answer 1

Date	Particulars		Dr	Cr		Reasons
Aug-01	Accrued Interest on Bank Notes					Interest Expenses on Bank Notes which are recgnized in account by crediting Accrued Interest in July is paid now.
		To Cash/ Bank
	(Being accrued interest of July paid now)
Aug-01	Bank Notes A/c		40000			As Principal of bank notes are type of of loan which may be standing in Balnce sheet as Current Liablities or Long term liablities is refunded now.
		To Cash/ Bank		40000
	(Being bank note principal is Paid )
Aug-05	Salary and Wages Payable A/c		7000			Being salary to be paid in july is booked already in our book by debiting salary & Wages A/c and crediting to salary & Wages payable a/c in the month of july. So now it is paid by debiting salary and wages payable a/c.
		To Cash/ Bank		7000
	Being salary of july paid
Aug-05	Salary & Wages A/c		1000			Being salary for the month of august is due by debiting the Salary & Wages A/c and crediting the salary & Wages Payable A/c.
		To Salary & Wages Payable A/c		1000
Aug-05	Salary and Wages Payable A/c		1000			Being salary for the month of August is paid now by debiting salary and wages Payable a/c
		To Cash/Bank A/c		1000
Aug-07	Accounts Payable A/c					Being accounts payable for the month of July is paid now by debiting Accounts Payable A/c.
		To Cash/Bank A/c
During August	Cash A/c		24500			Being accounts payable for the month of July is paid now by debiting Accounts Payable A/c.
		To Income-Rental fees		24500
During August	Cash A/c		211000			Being Income Earned form Greens fees ie recognized in accounts
		To Income-Green fees		211000
During August	Cash A/c		16250			Being fees for Golf Lessons which is started from next month from 25 more peoples is collected in the month of August.
		To Advance Receipts form Golf Lesson Revenue		16250
During August	Golf Course Maintenance Expenses		127500			Being Golf course Maintenace Expenses for the month of August is Paid .
		To Cash		127500
During August	Salary & Wages A/c		12000			Being Salary and wages for the month of August is booked
		To Salary and Wages Payable A/c		12000
During August	Salary and Wages Payable A/c		9000			Being salary and wages for the month of August is paid.
		To Cash		9000
During August	Utility Expenses		45100			Payment of Utility Expenses is booked in account.
		To Cash		45100
Aug-31	Interest Expenses on Bank Notes					Being interest expneses on remaining bank notes amount for the month of August is recognized in account @ 6% by debiting Interest Expenses Crediting Accrued Interest Expenses A/c.
		To Accrued Interest on Bank Notes
	Being Interest expenses on Bank notes is recognized in accounts
Aug-31	Advance Payments from Golf Lesson Revenue					Advance payments for Golf Lessons which are already received in July but lesson starts form august is accrued in July for four weeks.So we have recognize these four week lesson by debiting Advance payments from Golf Lessons A/c and crediting Income from Golf Lessons A/c.
		To Income from Golf Lesson Revenue
Aug-31	Golf Course Maintenance Expenses		13500			Golf course maintenance expenses is belong to August but not paid in august. So We recognize the maintenace expenses accrued to august by debiting Golf course Maintenace expenses and crediting the Golf course maintenace Expenses Payable a/c which is paid in September.
		To Golf Course Maintenance Expenses Payable A/c		13500
Aug-31	Insurance Expenses A/c					Insurance amount paid in earlier is now recognized expenses for the periods belongs these prepaid insurance by debiting Insurance a/c and crediting prepaid insurance.
		To Prepaid Insurance A/c
Aug-31	No entry to be passed for Outstanding Checks					Books of the company will not be affected
Aug-31	Bank Fees a/c		1600
		To Bank/cash A/c		1600
During August	Bank Service Charges A/c		35
		To Bank A/c		35
Aug-31	Utility Expenses A/c		360			Being Less booked in accounts under utility expenses is now adjusted by further debiting the utility Expense and creditng bank A/c.
		To Bank A/c		360
Aug-31	No Entry to be passed for Deposits in ransit					Books of the company will not be affected