Question

On December 1, a group of individuals formed a corporation to establish the Humbolt News, a neighborhood newspaper featuring "Help wanted" ads of individuals and advertising by local firms. The free paper will be mailed to about 20,000 local residents; revenue will be generated from advertising and want ads. The December transactions are summarized below:

The following transactions occurred during the month of December:

1	Sold common stock for cash.	$65,000
2	Paid December rent on furnished office.	5,000
3	Purchased on account, T-shirts displaying company,
	logo. The T-shirts were distributed at a grand opening.	550
4	Paid amount owed to creditor on account.	475
5	Collected "Help wanted" ad revenue in cash.	2,800
6	Paid post office for cost of bulk mailing.	810
7	Billed various firms for advertising in the first two issues of newspaper,	6,300
8	Paid Courier Service for transporting newspapers to post office.	70
9	Paid for printing newspaper.	3,900
10	Collected "Help wanted" ad revenue in cash.	4,570
11	Received invoice for December utilities, to be paid in January.	510
12	Paid for printing newspaper.	4,400
13	Paid December salaries.	6,100
14	Billed various firms for advertising in two issues of the newspaper.	8,950
15	Paid post office for cost of bulk mailing.	630
16	Paid Courier Service for transporting newspapers to post office.	90
17	Collected on accounts receivable.	5,100
18	Purchased a printer for office in exchange,
	for a six month note payable.	3,100

Required
a. Set up accounts for the following: Cash, Accounts Receivable, Office Equipment, Accounts Payable, Notes Payable, Common Stock, Advertising Revenue, Want Ad Revenue, Printing Expense, Advertising Expense, Utilities Expense, Salaries Expense, Rent Expense, and Delivery Expense. Prepare journal entries in a general journal and record the foregoing transactions in the accounts.

Answer 1

	Account	Debit	Credit
1	Cash	$         65,000
	Common Stock		$        65,000
2	Rent Expense	$            5,000
	Cash		$           5,000
3	Advertising Expense	$               550
	Accounts Payable		$              550
4	Accounts Payable	$               475
	Cash		$              475
5	Cash	$            2,800
	Want Ad Revenue		$           2,800
6	Delivery Expense	$               810
	Cash		$              810
7	Accounts Receivable	$            6,300
	Advertising Revenue		$           6,300
8	Delivery Expense	$                  70
	Cash		$                 70
9	Printing Expense	$            3,900
	Cash		$           3,900
10	Cash	$            4,570
	Want Ad Revenue		$           4,570
11	Utilities Expense	$               510
	Cash		$              510
12	Printing Expense	$            4,400
	Cash		$           4,400
13	Salaries Expense	$            6,100
	Cash		$           6,100
14	Accounts Receivable	$            8,950
	Advertising Revenue		$           8,950
15	Delivery Expense	$               630
	Cash		$              630
16	Delivery Expense	$                  90
	Cash		$                 90
17	Cash	$            5,100
	Accounts Receivable		$           5,100
18	Office Equipment	$            3,100
	Notes Payables		$           3,100