Question

Prepare journal entries to record the December transactions in the General. Use the following accounts as appropriate: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Equipment, Accumulated Depreciation, Accounts Payable, Wages Payable, Common Stock, Retained Earnings, Dividends, Service Revenue, Depreciation Expense, Wages Expense, Supplies Expense, Rent Expense, and Insurance Expense.
1-Dec Began business by depositing $10500 in a bank account in the name of the company in exchange for 1050 shares of $10 per share common stock.
1-Dec Paid the rent for the current month, $950 .
1-Dec Paid the premium on a one-year insurance policy, $600 .
1-Dec Purchased Equipment for $3600 cash.
5-Dec Purchased office supplies from XYZ Company on account, $300 .
15-Dec Provided services to customers for $7200 cash.
16-Dec Provided service to customers ABC Inc. on account, $5200 .
21-Dec Received $2400 cash from ABC Inc., customer on account.
23-Dec Paid $170 to XYZ company for supplies purchased on account on December 5 .
28-Dec Paid wages for the period December 1 through December 28, $4480 .
30-Dec Declared and paid dividend to stockholders $200 .

Answer 1

Answer:

1-Dec

Cash $10500 (debit)

Common Stock $10500 (credit)

1-Dec

Rent Expense $950 (debit)

Cash $950 (credit)

1-Dec

Prepaid Insurance $600 (debit)

Cash $600 (credit)

1-Dec

Equipment $3600 (debit)

Cash $3600 (credit)

5-Dec

Supplies Expense $300 (debit)

Accounts Payable $300 (credit)

15-Dec

Cash $7200 (debit)

Service Revenue $7200 (credit)

16-Dec

Accounts Receivable  $5200 (debit)

Service Revenue  $5200 (credit)

21-Dec

Cash $2400 (debit)

Accounts Receivable  $2400 (credit)

23-Dec

Accounts Payable $170 (debit)

Cash $170 (credit)

28-Dec

Wages Expense $4480 (debit)

Cash $4480 (credit)

30-Dec

Dividends $200 (debit)

Cash $200 (credit)

Explanation:

It is important to remember that Insurance paid in advance is an Asset hence, premium on a one-year insurance policy was recorded in Prepaid Insurance.