Junktrader is an online company that specializes in matching buyers and sellers of used items. Buyers and sellers can purchase a membership with Junktrader, which provides them advance notice of potentially attractive offers. Prepare journal entries for the following transactions, which occurred during a recent month, and determine Junktrader’s preliminary net income.
a. Junktrader provided online advertising services for another company for $ 200 on account.
b. On the last day of the month, Junktrader paid $ 50 cash to run an ad promoting the company’s services. The ad ran that day in the local newspaper.
c. Received $ 200 cash in membership fees for the month from new members.
d. Received an electricity bill for $ 85 for usage this month. The bill will be paid next month.
e. Billed a customer $ 180 for helping sell some junk. Junktrader expects to receive the customer’s payment by the end of next month.