Answer and Explanation:
a. The Journal entry is shown below:-
1. Cash Dr, $35,000
To common stock $35,000
(Being received cash in exchange of common stock is recorded)
2. No Journal entry is required
3. Equipment Dr, $3,500
To Accounts payable $3,500
(Being equipment is recorded)
4. Accounts receivable Dr, $10,000
To service revenue $10,000
(Being service revenue is recorded)
5. Cash Dr, $140
To Service revenue $140
(Being Cash is recorded)
6. Accounts payable Dr, $700
To Cash $700
(Being accounts payable is recorded)
7. Salaries and wages expenses Dr, $3,000
To Cash $3,000
(Being Salaries and wages expenses is recorded)
b. The transaction of T accounts is shown below:-
Cash
Oct 1 $35,000 Oct 27 $700
Oct 10 $140 Oct 30 $3,000
Oct 31 $31,440
Accounts receivable
Oct 6 $10,000
Oct 31 $10,000
Equipment
Oct 3 $3,500
Oct 31 $3,500
Accounts payable
Oct 27 $700 Oct 3 $3,500
Oct 31 $2,800
Common stock
Oct 1 $35,000
Oct 31 $35,000
Service revenue
Oct 6 $10,000
Oct 10 $140
Oct 31 $10,140
Salaries and wages revenue
Oct 30 $3,000
Oct 31 $3,000
