Question

Scratch Miniature Golf and Driving Range Inc. was opened on March 1 by Scott Verplank. The following selected events and transactions occurred during March. Mar. 1 Invested $50,000 cash in the business in exchange for common stock. 3 Purchased Michelle Wie's Golf Land for $38,000 cash. The price consists of land $10,000, building $22,000, and equipment $6,000. (Make one compound entry). 5 Advertised the opening of the driving range and miniature golf course, paying advertising expenses of $1,600. 6 Paid cash $1,480 for a one‐year insurance policy. 10 Purchased golf equipment for $2,500 from Singh Company, payable in 30 days. 18 Received golf fees of $1,200 in cash. 25 Declared and paid a $500 cash dividend. 30 Paid wages of $900. 30 Paid Singh Company in full. 31 Received $750 of fees in cash.Scratch uses the following accounts: Cash, Prepaid Insurance, Land, Buildings, Equipment, Accounts Payable, Common Stock, Dividends, Service Revenue, Advertising Expense, and Salaries and Wages Expense. Instructions: Journalize the March transactions.

Answer 1

Answer and Explanation:

The Journal entry is shown below:-

1. Cash Dr, 50,000

         To Common Stock 50,000

(Being issuance of common stock is recorded)

2. Land Dr, 10,000

Buildings Dr, 22,000

Equipment Dr, 6,000

            To Cash 38,000

(Being fixed assets is recorded)

3. Dr. Advertising Expense Dr, 1,600

            To Cash $1,600

(Being advertisement expenses is recorded)

4. Prepaid Insurance Dr, $1,480

             To Cash $1,480

(Being prepaid insurance is recorded)

5.Equipment Dr, $2,500

             To Accounts Payable $2,500

(Being purchase of equipment is recorded)

6. Cash $1,200

              To Service Revenue $1,200

(Being service revenue is recorded)

7. Dividends Dr, $500

           To Cash $500

(Being dividend is recorded)

8. Salaries and Wages Expense Dr, $900

             To Cash 900

(Being salaries and wages expenses is recorded)

9. Accounts Payable Dr, 2,500

             To Cash 2,500

(Being accounts payable is recorded)

10. Cash Dr, $750

            To Service Revenue $750

(Being service revenue is recorded)