Question

For each transaction, (a) analyze the transaction using the accounting equation, (b) record the transaction in journal entry form, and (c) post the entry using T-accounts to represent ledger accounts. Use the following (partial) chart of accounts—account numbers in parenthesis: Cash (101); Accounts Receivable (106); Trucks (153); Equipment (167); Accounts Payable (201); Common Stock (307); Retained Earnings (318); Services Revenue (403); Wages Expense (601), and Landscaping Expense (696).
1.
On May 15, DeShawn Tyler opens a landscaping company called Elegant Lawns by investing $70,000 in cash along with equipment having a $30,000 value in exchange for common stock.

2. On May 21, Elegant Lawns purchases office supplies on credit for $280.
3. On May 25, Elegant Lawns receives $7,800 cash for performing landscaping services.
4.
On May 30, Elegant Lawns receives $1,000 cash in advance of providing landscaping services to a customer.

Answer 1

Answer Explanation:

Accounting equation:

          Asset = Liabilities + Equity

1)   70,000  + 30,000 =   0  +  100,000

2)  70,000 + 30,000  = 280 + 100,000 - 280

3) 77,800 + 30,000    = 280 + 100,000 + 7,800 - 280

4) 78.800 + 30,000   = 1,280 + 100,000 + 7,800 - 280

Journal entries:

cash           70,000 debit

equipment 30,000 debit

        Common Stock 100,000 credit

Landscaping Expense 280 debit

        account payable                280 credit

cash 7,800 debit

service revenue 7,800 credit

cash 1,000 debit

unearned revenue 1,000 credit

T-Accounts

     Cash                  Equipment        Landscaping Expense

Debit     Credit       Debit     Credit          Debit     Credit

70,000                   30,000                       280

 7,800

 1,000                  

78,800

Account Payable     Unearned Revenue    Common Stock

Debit     Credit              Debit     Credit         Debit     Credit

280                               1,000                                      100,000

Service revenue

Debit     Credit  

             7,000

Note: I uused landscaping expense as there was no supplies account to pick from your choise.