Question

Kacy Spade, owner, invested $10,750 cash in the company in exchange for common stock. The company purchased office supplies for $312 cash. The company purchased $5,945 of office equipment on credit. The company received $1,268 cash as fees for services provided to a customer. The company paid $5,945 cash to settle the payable for the office equipment purchased in transaction c. The company billed a customer $2,279 as fees for services provided. The company paid $525 cash for the monthly rent. The company collected $957 cash as partial payment for the account receivable created in transaction f. The company paid a $900 cash dividend to the owner (sole shareholder).
Prepare general journal entries to record the transactions above for Spade Company by using the following accounts: Cash; Accounts Receivable; Office Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Fees Earned; and Rent Expense.

Answer 1

Answer:

Accounts                                                                 Debit($)       Credit($)

Cash                                                                            10,750

Common Stock                                                                                10,750

Being cash invested for common stock

in the business

Office Supplies                                                           312

Cash                                                                                                  312

Being office supplies purchased with cash

Office Equipment                                                       5,945

Account Payable                                                                            5,945

Being office equipment purchased on credit

Cash                                                                             1,268

Fees Earned                                                                                     1,268

Being cash received on service rendered

to a customer

Account Payable                                                       5,945

Cash                                                                                                5,945

Being settlement of amount owned for

office equipment

Account receivable                                                   2,279

Fees Earned                                                                                    2,279

Being recognition of amount owned

by customer

Rent Expense                                                           525

Cash                                                                                                 525

Being cash paid for rent

Cash                                                                         957

Account Receivable                                                                       927

Being cash collected for account receivable

Dividend                                                                   900

Cash                                                                                             900

Being dividend paid with cash

Explanation:

Journal entry entries are used to record accounting effect of business transactions. General journal has two sides that make up debit and credit.

Entries on the debit side are assets or expenses while entries on the credit sides are liabilities, equity and income.

Journal also has a narration for each accounting event to provide information about the entry.