Question

Swifty Corporation provides security services. Selected transactions for Swifty Corporation are presented below.Oct. 1Issued common stock in exchange for $77,900 cash from investors.2Hired part-time security consultant. Salary will be $2,400 per month. First day of work will be October 15.4Paid 1 month of rent for building for $2,400.7Purchased equipment for $21,200, paying $4,700 cash and the balance on account.8Paid $2,500 for advertising.10Received bill for equipment repair cost of $500.12Provided security services for event for $3,800 on account.16Purchased supplies for $480 on account.21Paid balance due from October 7 purchase of equipment.24Received and paid utility bill for $175.27Received payment from customer for October 12 services performed.31Paid employee salaries and wages of $6,000. Journalize the transactions.

Answer 1

Answer and Explanation:

The Journal entry is shown below:-

1. Cash Dr, $77,900

       To Common stock $77,900

(Being common stock issued is recorded)

2. No Journal Entry is required

3. Rent expense Dr, $2,400

       To Cash $2,400

(Being rent paid is recorded)

4. Equipment Dr, $21,200

       To Cash $4,700

       To Accounts payable $16,500

(Being Purchase on equipment is recorded)

5. Advertisement expenses Dr, $2,500

        To Cash $2,500

(Being paid on advertisement is recorded)

6. Repair and maintenance Dr, $500

       To Accounts payable $500

(Being bill received on repairs  is recorded)

7. Accounts receivable Dr, $3,800

       To service revenue $3,800

(Being provided services is recorded)

8. Supplies Dr, $480

       To Accounts payable $480

(Being supplies purchase on account is recorded)

9. Accounts payable Dr, $16,500

        To Cash $16,500

(Being balance paid is recorded)

10. Utilities Expenses Dr, $175

         To Cash $175

(Being utilities expenses is recorded)

11. Cash Dr, $3,800

      To Accounts receivable $3,800

(Being cash is recorded)

12. Salaries and wages expenses Dr, $6,000

      To Cash $6,000

(Being salaries and wages is recorded)