Question

Transactions for the Oleg Thorn Company for the month of June are presented below.

Answer 1

Answer:

The Journal entry for each of the transaction is as follows:

(i) On June 1,

Cash A/c Dr. $5,000

     To Oleg Thorn's capital A/c $5,000

(To record the capital invested)

(ii) On June 2,

Equipment A/c Dr. $3,600  

       To accounts payable    $3,600

(To record the purchase of equipment on account)

(iii) On June 3,

Rent Expense A/c Dr. $800

          To cash A/c                $800

(To record the rent paid)

(iv) On June 12,

Accounts receivable - K. Johnsen A/c Dr. $400

                To service revenue                               $400

(To record the service revenue)

The accounts to be debited and credited for each transaction is as follows:

(i) On June 1,

Debit = Cash and Credit = Oleg Thorn's capital

(ii) On June 2,

Debit = Equipment and Credit = accounts payable

(iii) On June 3,

Debit = Rent Expense and Credit = cash

(iv) On June 12,

Debit = Accounts receivable - K. Johnsen and Credit = service revenue