Question

Journalize the transactions of Lawrence Engineering. Include an explanation with each journal entry. Use the following accounts: Cash; Accounts Receivable; Office Supplies; Equipment; Accounts Payable; Notes Payable; Common Stock: Dividends; Service Revenue; and Utilities Expense.
Jul. 2 Received $14,000 contribution from Brett Lawrence in exchange for common stock.
4 Paid utility expense of $370.
5 Purchased equipment on account, $1,600.
10 Performed services for a client on account, $2,900.
12 Borowed $7,100 cash, signing a note payable.
19 Cash dividends of $200 were paid to stockholders.
21 Purchased office supplies for $840 and paid cash.
27 Paid the liability from July 5.

Answer 1

Answer:

The Journal entries are as follows:

(i) On July 2,

Cash A/c Dr. $14,000

   To common stock     $14,000

(To record the common stock)

(ii) Only July 4,

Utility expenses A/c Dr. $370

    To cash A/c                          $370

(To record the utility expenses paid)

(iii) Only July 5,

Equipment A/c Dr. $1,600

    To accounts payable A/c      $1,600

(To record equipment purchased on account)

(iv) Only July 10,

Account receivables A/c Dr. $2,900

    To service revenue A/c      $2,900

(To record Performed services for a client on account)

(v) Only July 12,

Cash A/c Dr. $7,100

   To notes payable    $7,100

(To record the borrowed cash on notes payable)

(vi) Only July 19,

Dividend A/c Dr. $200

   To cash                    $200

(To record cash dividend paid to stockholders)

(vii) Only July 21,

Office supplies A/c Dr. $840

   To cash                               $840

(To record office supplies paid cash)

(viii)  Only July 27,

Accounts payable A/c Dr. $1,600

   To cash                               $1,600

(To record the liability paid)