Felix’s Gardening Supply had the following transactions involving cash during early August:
August1 Purchased four lawnmowers for $300 each.
August2 Purchased $320 of office supplies for cash.
August4 Paid $400 of income taxes that had been accrued two months ago.
August4 Received $450 for lawn care services provided.
August5 Paid$500ofsalariesthathadnotbeenaccrued.
August7 Accrued $100 of interest on a bank loan.
(a) Prepare general journal entries for the transactions.
(b) After reviewing the journal entries prepared in part (a), the owner of Felix’s Gardening Supply is convinced that each transaction has been ‘‘double-counted.’’ Write a short memo to the owner explaining why each entry requires at least one debit and one credit and why this procedure does not double-count the transactions.

  • CreatedMarch 27, 2015
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