The petty cash fund of the Wee Ones Agency was established on May 1, 2014, at $75. At the end of the month, the fund contained $12.74 and had the following receipts: film rentals, $19.40; refreshments for meetings, $22.81 (both expenditures to be classified as Entertainment Expense); postage, $6.95; and printing, $13.10.
1. Prepare the journal entry to record the establishment of the fund.
2. Prepare a summary of the petty cash payments similar to Exhibit 8.2 and then record the reimbursement on May 31.
3. Explain when the Petty Cash account would be credited in a journal entry.