Question

Please Make Journal entries for the following events   1) On October 2nd, REI received the full payment (interest and principal) for the three-month $41,325 note issued on July 1st (transaction #1 – quarter 3). The interest received is for 3 months.   2) REI felt that their inventory levels were getting lower and they should purchase more units from EDL. On October 4th, REI purchased on account 500 DoorSpy units at $56 each.     3) On October 6th, Ella got a call from Larry who is a manager of multiple apartment complexes and heard about how well the DoorSpy was working at other apartments in the city. Larry placed an order for 400 DoorSpy units at $90 each plus $55 each for installation. Larry mentioned he was a bit short on cash currently, but when rent comes due on November 1st, he should be able to pay the full amount. REI agreed to extend him credit for this purchase and delivered the DoorSpy units on October 6th with installation to take place in a week. 4) On October 9th, REI received payment in full from Saskatoon Co-op. This sale was made during September (transaction/event #25 – quarter 3). 5) On October 13th, REI completed the installation from the sales transaction #3.

Answer 1

Journal Entries for the Books of REI

1)Oct. 9 Cash A/c Dr  $41,325

Oct. 9 To Debtors A/c $41,325

(Being cash recived from debtors)

2) Oct. 4 Purchase A/c Dr $28,000

Oct. 4 To Cash A/c $28,000

(Being Goods purchased in cash)

(500 Door spy were purcased at $56. 500*$56= 28,000)

3) Oct. 6 Larry A/c Dr $58,000

Oct. 6 To Sales A/c $58,000

(Being Goods sold in credit)

(Door spy amount $90 and installation amount $55 both are incuded here)

4) Oct. 9 Cash A/c Dr transaction#25

Oct. 9 To Debtor A/c transaction#25

(Being cash recived from Saskatoon Co-op)

(as the amount recived is not given in the question only transaction number is given)

5) Oct. 13 NO Transaction has been done of Goods and Cash, So no Entry