Question

On January 1, 2021, the general ledger of Dynamite Fireworks includes the following account balances:

Answer 1

Answer:

January 2 Purchase rental space for one year in advance, $6,300 ($525/month).

Dr Prepaid expense 6,300

    Cr Cash 6,300

January 9 Purchase additional supplies on account, $3,600.

Dr Supplies 3,600

    Cr Accounts payable 3,600

January 13 Provide services to customers on account, $25,600.

Dr Accounts receivable 25,600

    Cr Service revenue 25,600

January 17 Receive cash in advance from customers for services to be provided in the future, $3,800.

Dr Cash 3,800

    Cr Unearned revenue 3,800

January 20 Pay cash for salaries, $11,600.

Dr Wages expense 11,600

    Cr Cash 11,600

January 22 Receive cash on accounts receivable, $24,200.

Dr Cash 24,200

    Cr Accounts receivable 24,200

January 29 Pay cash on accounts payable, $4,100.

Dr Accounts payable 4,100

    Cr Cash 4,100

adjusting entries:

Rent for the month of January has expired.

Dr Rent expense 525

    Cr Prepaid rent 525

Supplies remaining at the end of January total $3,500.

Dr Supplies expense 3,300

    Cr Supplies 3,300