Answer:
The May transactions are:
May 5: Received cash from clients on account, $2,450.
May 9: Paid cash for a newspaper advertisement, $225.
May 13: Paid Office Station Co. for part of the debt incurred on April 5, $640.
May 15: Recorded services provided on account for the period May 1-15, $9,180.
May 16: Paid part-time receptionist for two weeks' salary including the amount owed on April 30, $750.
May 17: Recorded cash from cash clients for fees earned during the period May 1-16, $8,360.
May 20: Purchased supplies on account, $735.
May 21: Recorded services provided on account for the period May 16-20, $4,820.
May 25: Recorded cash from cash clients for fees earned for the period May 17-23, $7,900.
May 27: Received cash from clients on account, $9,520.
May 28: Paid part-time receptionist for two weeks' salary, $750.
May 30: Paid telephone bill for May, $260.
May 31: Paid electricity bill for May, $810.
May 31: Recorded cash from cash clients for fees earned for the period May 26-31, $3,300.
May 31: Recorded services provided on account for the remainder of May, $2,650.
May 31: Kelly withdrew $10,500 for personal use.
Solution:
Kelly Pitney
General Journal:
May 3:
Debit Cash $4,500
Credit Unearned Fees $4,500
To record advance payment for services.
May 5:
Debit Cash $2,450
Credit Accounts Receivable $2,450
To record cash receipt on account.
May 9:
Debit Miscellaneous Expense $225
Credit Cash $225
To record cash paid for a newspaper advertisement.
May 13:
Debit Accounts Payable $640
Credit Cash $640
To record part debt settlement to Office Station Co.
May 15:
Debit Accounts Receivable $9,180
Credit Fees Earned $9,180
To record services provided to clients on account, May 1 to 15.
May 16:
Debit Salaries Payable $750
Credit Cash $750
To record salaries paid.
May 17:
Debit Cash $8,360
Credit Fees Earned $8,360
To record cash receipt from clients for fees earned, May 1 to 16.
May 20:
Debit Supplies $735
Credit Accounts Payable $735
To record supplies purchased on account.
May 21:
Debit Accounts Receivable $4,820
Credit Fees Earned $4,820
To record fees earned, May 16 - 20.
May 25:
Debit Cash $7,900
Credit Fees Earned $7,900
To record cash receipt from clients for fees earned, May 17 - 23.
May 27:
Debit Cash $9,520
Credit Accounts Receivable $9,520
To record cash receipt from clients on account.
May 28:
Debit Salaries Payable $750
Credit Cash $750
To record salary paid.
May 30:
Debit Miscellaneous Expense $260
Credit Cash $260
To record payment of telephone bill for May.
May 31:
Debit Miscellaneous Expense $810
Credit Cash $810
To record electricity bill for May paid.
May 31:
Debit Cash $3,300
Credit Earned Fees $3,300
To record cash receipts from clients for May 26 - 31.
May 31:
Debit Accounts Receivable $2,650
Credit Fees Earned $2,650
To record fees earned for services on account.
May 31:
Debit Kelly Pitney, Drawing $10,500
Credit Cash $10,500
To record drawing for personal use.
Explanation:
The general journal is an important accounting tool that helps to record transactions as they occur daily. It identifies the two accounts involved in each transaction, which should be debited or credited as the case may be.
The account that is debited is the account that receives value. The account that is credited the account that gives value. Sometimes, for each business transaction or event more than two accounts are involved.
It is from the general journal that transactions are posted to the general ledger. The general ledger is a book that records transactions affecting all the accounts. It is not necessarily in a physical book form.
