Answer:
A. Journal Entries:
1. Debit Cash $7,000
Credit Common Stock $7,000
To record the issuance of stock.
2. Debit Rent Expense $750
Credit Cash $750
To record the payment of rent expense for December.
3. Debit Advertising Expense $500
Credit Account Payable $500
To record the accrued expense.
4. Debit Cash $15,000
Credit Notes Payable $15,000
To record the borrowing of cash from bank with a note payable.
5. Debit Cash $1,200
Credit Counseling Services Revenue $1,200
To record the receipt of cash for counseling services rendered.
6. Debit Accounts Receivable $6,800
Credit Counseling Services Revenue $6,800
To record revenue for counseling services rendered.
7. Debit Salary Expense $2,200
Cash Cash $2,200
To record the payment for secretary salary.
8. Debit Utilities Expense $370
Credit Cash $370
To record the payment of utilities expense for the month.
9. Debit Dividends $900
Credit Cash $900
To record the payment of dividends.
10. Debit Land $13,000
Credit Cash $13,000
To record the purchase of land for cash.
11. Debit Interest Expense $100
Credit Cash $100
To record the payment of interest on Note Payable.
B. T-accounts:
Cash
Account Titles Debit Credit
Common stock $7,000
Rent Expense $750
Note payable 15,000
Counseling Services 1,200
Salary Expense 2,200
Utilities Expense 370
Dividends 900
Land 13,000
Interest Expense 100
Accounts Receivable
Account Titles Debit Credit
Counseling Services $6,800
Land
Account Titles Debit Credit
Cash $13,000
Accounts Payable
Account Titles Debit Credit
Advertising expense $500
Notes Payable
Account Titles Debit Credit
Cash $15,000
Common Stock
Account Titles Debit Credit
Cash $7,000
Retained Earnings
Account Titles Debit Credit
Counseling Services Revenue
Account Titles Debit Credit
Cash $1,200
Rent Expense
Account Titles Debit Credit
Cash $750
Advertising Expense
Account Titles Debit Credit
Accounts Payable $500
Interest Expense
Account Titles Debit Credit
Cash $100
Salary Expense
Account Titles Debit Credit
Cash $2,200
Utilities Expense
Account Titles Debit Credit
Cash $370
Dividends
Account Titles Debit Credit
Cash $900
Explanation:
a) Data and Calculations:
Transactions Analysis:
1. Cash $7,000 Common Stock $7,000
2. Rent Expense $750 Cash $750
3. Advertising Expense $500 Advertising Payable $500
4. Cash $15,000 Notes Payable $15,000
5. Cash $1,200 Counseling Services Revenue $1,200
6. Accounts Receivable $6,800 Counseling Services Revenue $6,800
7. Salary Expense $2,200 Cash $2,200
8. Utilities Expense $370 Cash $370
9. Dividends $900 Cash $900
10. Land $13,000 Cash $13,000
11. Interest Expense $100 Cash $100
