Question

The transactions of Spade Company appear below. Kacy Spade, owner, invested $100,750 cash in the company in exchange for common stock. The company purchased office supplies for $1,250 cash. The company purchased $10,050 of office equipment on credit. The company received $15,500 cash as fees for services provided to a customer. The company paid $10,050 cash to settle the payable for the office equipment purchased in transaction c. The company billed a customer $2,700 as fees for services provided. The company paid $1,225 cash for the monthly rent. The company collected $1,125 cash as partial payment for the account receivable created in transaction f. The company paid a $10,000 cash dividend to the owner (sole shareholder). Required: 1. Prepare general journal entries to record the transactions above for Spade Company by using the following accounts: Cash; Accounts Receivable; Office Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Fees Earned; and Rent Expense. 2. Post the above journal entries to T-accounts, which serve as the general ledger for this assignment.

Answer 1

Answer:

Kacy Spade, owner, invested $100,750 cash in the company in exchange for common stock.

Dr Cash 100,750

    Cr Common stock 100,750

The company purchased office supplies for $1,250 cash.

Dr Supplies 1,250

    Cr Cash 1,250

The company purchased $10,050 of office equipment on credit.

Dr Equipment 10,050

    Cr Accounts payable 10,050

The company received $15,500 cash as fees for services provided to a customer.

Dr Cash 15,500

    Cr Fees earned 15,500

The company paid $10,050 cash to settle the payable for the office equipment purchased in transaction

Dr Accounts payable 10,050

    Cr Cash 10,050

c. The company billed a customer $2,700 as fees for services provided.

Dr Accounts receivable 2,700

    Cr Fees earned 2,700

The company paid $1,225 cash for the monthly rent.

Dr Rent expense 1,225

    Cr Cash 1,225

The company collected $1,125 cash as partial payment for the account receivable created in transaction

Dr Cash 1,125

    Cr Accounts receivable 1,125

f. The company paid a $10,000 cash dividend to the owner (sole shareholder).

Dr Dividends 10,000

    Cr Cash 10,000

Cash                                                     Common stock

debit        credit                                   debit        credit  

100,750                                                                100,750

                1,250

15,500

                10,050

                1,225

1,125

                10,000

94,850

Supplies                                               Equipment

debit        credit                                   debit        credit  

1,250                                                    10,050

Accounts payable                               Fees earned

debit        credit                                   debit        credit  

                10,050                                                  15,500

10,050                                                                   2,700  

0               0                                                           18,200

Accounts receivable                           Rent expense

debit        credit                                   debit        credit  

2,700                                                    1,225

                1,125  

1,575

Dividends                                            

debit        credit                                  

10,000