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Horngren'S Financial And Managerial Accounting
Found in: Page 107

Short Answer

Question: Journalizing transactions, posting journal entries to T-accounts, and preparing a trial balance Victor Yang practices medicine under the business title Victor Yang, M.D. During March, the medical practice completed the following transactions:

Mar. 1 Yang contributed $62,000 cash to the business in exchange for common stock.

5 Paid monthly rent on medical equipment, $570.

9 Paid $14,000 cash to purchase land to be used in operations.

10 Purchased office supplies on account, $1,500.

19 Borrowed $27,000 from the bank for business use.

22 Paid $1,400 on account.

28 The business received a bill for advertising in the daily newspaper to be paid in April, $220.

31 Revenues earned during the month included $6,700 cash and $5,800 on account.

31 Paid employees’ salaries $2,100, office rent $1,500, and utilities $350. Record as a compound entry.

31 The business received $1,000 for medical screening services to be performed next month.

31 Paid cash dividends of $7,100.

The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Land; Accounts Payable; Advertising Payable; Unearned Revenue; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense; and Advertising Expense. Requirements 1. Journalize each transaction. Explanations are not required.

A compound is an entry with various debits and credits and required journal entry is passed in step 2.

See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1: Definition of Compound Entry

Acompound journal entry is defined as a journal entry that has more than one item on the debit or credit side.

Step 2: Journal Entries Passed

Journal entry

Date

Particulars

Debit ($)

Credit ($)

March

1

Cash

$62,000

Common Stock

$62,000

5

Rent expense

$570

Cash

$570

9

Land

$14,000

Cash

$14,000

10

Office Supplies

$1,500

Accounts Payables

$1,500

19

Cash

$27,000

Notes Payable

$27,000

22

Accounts Payable

$1,400

Cash

$1,400

28

Advertising Expense

$220

Advertising Payable

$220

31

Cash

$6,700

Accounts Receivables

$5,800

Service Revenue

$12,500

31

Salaries Expense

$2,100

Rent Expense

$1,500

Utilities Expense

$350

Cash

$3,950

31

Cash

$1,000

Unearned Revenue

$1,000

31

Dividends

$7,100

Cash

$7,100

Most popular questions for Business-studies Textbooks

Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance

Terrence Murphy opened a law office on January 1, 2018. During the first month of operations, the business completed the following transactions:

Jan. 1 Murphy contributed $78,000 cash to the business, Terrence Murphy, Attorney. The business issued common stock to Murphy.

3 Purchased office supplies, $600, and furniture, $1,700, on account.

4 Performed legal services for a client and received $1,000 cash.

7 Purchased a building with a market value of $130,000, and land with a market value of $25,000. The business paid $25,000 cash and signed a note payable to the bank for the remaining amount.

11 Prepared legal documents for a client on account, $400.

15 Paid assistant’s semimonthly salary, $1,120.

16 Paid for the office supplies purchased on January 3 on account.

18 Received $2,700 cash for helping a client sell real estate.

19 Defended a client in court and billed the client for $1,800.

25 Received a bill for utilities, $600. The bill will be paid next month.

29 Received cash on account, $1,500.

30 Paid $1,200 cash for a 12-month insurance policy starting on February 1.

30 Paid assistant’s semimonthly salary, $1,120.

31 Paid monthly rent expense, $1,800.

31 Paid cash dividends of $2,200.

Requirements

2. Open the following four-column accounts including account numbers: Cash, 101; Accounts Receivable, 111; Office Supplies, 121; Prepaid Insurance, 131; Land, 141; Building, 151; Furniture, 161; Accounts Payable, 201; Utilities Payable, 211; Notes Payable, 221; Common Stock, 301; Dividends, 311; Service Revenue, 411; Salaries Expense, 511; Rent Expense, 521; and Utilities Expense, 531.

Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance

Terrence Murphy opened a law office on January 1, 2018. During the first month of operations, the business completed the following transactions:

Jan. 1 Murphy contributed $78,000 cash to the business, Terrence Murphy, Attorney. The business issued common stock to Murphy.

3 Purchased office supplies, $600, and furniture, $1,700, on account.

4 Performed legal services for a client and received $1,000 cash.

7 Purchased a building with a market value of $130,000, and land with a market value of $25,000. The business paid $25,000 cash and signed a note payable to the bank for the remaining amount.

11 Prepared legal documents for a client on account, $400.

15 Paid assistant’s semimonthly salary, $1,120.

16 Paid for the office supplies purchased on January 3 on account.

18 Received $2,700 cash for helping a client sell real estate.

19 Defended a client in court and billed the client for $1,800.

25 Received a bill for utilities, $600. The bill will be paid next month.

29 Received cash on account, $1,500.

30 Paid $1,200 cash for a 12-month insurance policy starting on February 1.

30 Paid assistant’s semimonthly salary, $1,120.

31 Paid monthly rent expense, $1,800.

31 Paid cash dividends of $2,200.

Requirements

  1. Record each transaction in the journal, using the following account titles: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Land; Building; Furniture; Accounts Payable; Utilities Payable; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; and Utilities Expense. Explanations are not required.
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