Barbara Jones opened Barbs Book Business on February 1. You have been hired to maintain the companys
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Question:
Barbara Jones opened Barb’s Book Business on February 1. You have been hired to maintain the company’s financial records. The following transactions occurred in February, the first month of operations. |
1. | Received shareholders’ cash contributions on February 1 totaling $23,000 to form the corporation; issued 1,000 shares of common stock. |
2. | Paid $2,625 cash on February 2 for three months’ rent for office space. |
TIP: For convenience, simply record the full amount of the payment as an asset (Prepaid Rent). At the end of the month, this account will be adjusted to its proper balance. | |
3. | Purchased supplies on February 3 for $330 cash. |
4. | Signed a promissory note on February 4, payable in two years; deposited $15,600 in the company’s bank account. |
5. | On February 5, purchased equipment for $5,400 and land for $10,200. |
6. | Placed an advertisement in the local paper on February 6 for $740 cash. |
7. | Recorded sales on February 7 totaling $3,950; $1,700 was in cash and the rest on accounts receivable. |
8. | Collected accounts receivable of $114 from customers on February 8. |
9. | On February 9, repaired one of the computers for $139 cash. |
10. | Incurred and paid employee wages on February 28 of $850. |
TIP: Most repairs involve costs that do not provide additional future economic benefits. |
Required: | |||||||||
1. | Prepare the journal entry for each of the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.
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Related Book For
Fundamentals of Financial Accounting
ISBN: 978-0078025914
5th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby
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