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21E

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Horngren'S Financial And Managerial Accounting
Found in: Page 96

Short Answer

Question: E2-21 Journalizing transactions from T-accounts In December 2018, the first five transactions of Abling’s Lawn Care Company have been posted to the T-accounts. Prepare the journal entries that served as the sources for the five transactions. Include an explanation for each entry

Cash

  1. 57,000 40,000 (3) 3,800 (5) (2) 800 (3) 40,000 Office Supplies Common Stock Building Equipment Accounts Payable 800 (2) 46,000 (4) (5) 3,800 Notes Payable 57,000 (1) (4) 46,000 40,000 (3) 3,800 (5) (2) 800 (3) 40,000 Office Supplies Common Stock Building Equipment Accounts Payable 800 (2) 46,000 (4) (5) 3,800 Notes Payable 57,000 (1)

T-Account is a ledger account in the form t-shape and journal entries are recorded. Journal entry shown in step 2.

See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1: Definition of T-Account

T-Account is defined as the summarised format of the ledger accounts which is prepared in the form of a T-shape.

Step 2: Recording Journal Entries

Journal entry

Date

Particulars

Amount ($)

Amount ($)

1)

Cash

$57,000

Common Stock

$57,000

(Common stock issued for cash)

2)

Office Supplies

$800

Accounts Payable

$800

(Office supplies purchased on credit)

3)

Building

$40,000

Cash

$40,000

(Building purchased for cash)

4)

Cash

$46,000

Notes Payable

$46,000

(Cash raised using notes payable)

5)

Equipment

$3,800

Cash

$3,800

(Equipment purchased using cash)

Most popular questions for Business-studies Textbooks

Journalizing transactions, posting to T-accounts, and preparing a trial balance

Consider the following transactional data for the first month of operations for Crystal Clear Cleaning.

Nov. 1 Stockholders contributed $15,000 and a truck, with a market value of $3,000, to the business in exchange for common stock.

2 The business paid $4,000 to Pleasant Properties for November through February rent. (Debit Prepaid Rent)

3 Paid $4,800 for a business insurance policy for the term November 1, 2018 through October 31, 2019. (Debit Prepaid Insurance)

4 Purchased cleaning supplies on account, $320.

5 Purchased on account an industrial vacuum cleaner costing $1,500. The invoice is payable November 25.

7 Paid $3,900 for a computer and printer.

9 Performed cleaning services on account in the amount of $4,700.

10 Received $200 for services rendered on November 9. 15 Paid employees, $400.

16 Received $15,000 for a 1-year contract beginning November

16 for cleaning services to be provided. Contract begins November 16, 2018, and ends November 15, 2019. (Credit Unearned Revenue)

17 Provided cleaning services and received $400 cash.

18 Received a utility bill for $175 with a due date of December 4, 2018. (Use Accounts Payable)

20 Borrowed $36,000 from bank with interest rate of 6% per year.

21 Received $500 on account for services performed on November 9.

25 Paid $750 on account for vacuum cleaner purchased on November 5.

29 Paid $200 for advertising.

30 Cash dividends of $1,400 were paid to stockholders

3. Post the journal entries to the T-accounts, and calculate account balances

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