Question

Eli owns an insurance office, while Olivia operates a maintenance service that provides basic custodial duties. For the month of May, the following transactions occurred. May 2 Olivia decides that she will need insurance for a one-day special event at the end of the month and pays Eli $300 in advance. May 5 Olivia provides maintenance services to Eli’s insurance offices on account, $425. May 7 Eli borrows $500 from Olivia by signing a note. May 14 Olivia purchases maintenance supplies from Spot Corporation, paying cash of $200. May 19 Eli pays $425 to Olivia for maintenance services provided on May 5. May 25 Eli pays the utility bill for the month of May, $135. May 28 Olivia receives insurance services from Eli equaling the amount paid on May 2. May 31 Eli pays $500 to Olivia for money borrowed on May 7. Required: Record each transaction for Eli’s insurance Services. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Answer:Total Dr $2,785, Total Cr $2,785

Explanation:

The journal entry for the transaction will be

May 2 Dr : Prepaid insurance$ 300, Cr : Cash $300

May 5 Dr : maintenance expense $425,Cr :Account payable $425

May 7 Dr :Cash $500,Cr :Note payable $500

May 14 Dr :Supplies $200, Cr :Cash $200

May 19 Dr Account payable $425,Cr :Cash $425

May 25 Dr :utility expense $135,Cr Cash $135

May 28 Dr : insurance expense $300, Cr insurance prepaid $300

May 31 Dr : Notes payable $500,Cr Cash $500

Total Dr:$2,785,Cr $2,785