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Horngren'S Financial And Managerial Accounting
Found in: Page 91

Short Answer

Journalizing transactions John Daniel opened a medical practice in Sacramento, California, and had the following transactions during the month of January.

Jan. 1 The business received $34,000 cash and issued common stock to Daniel.

2 Purchased medical supplies on account, $17,000.

4 Performed services for patients receiving $1,600.

12 Paid monthly office rent of $3,000.

15 Recorded $7,000 revenue for services rendered to patients on account.

Journalize the transactions of John Daniel, M.D. Include an explanation with each entry.

Accounts receivables are amounts owed to the business and required journal entries are passed in step 2.

See the step by step solution

Step by Step Solution

Definition of accounts receivables

Accounts receivables are defined as the amount of money owed to a business by clients or customers in exchange for goods or services

Journal Entries

Journal entry

Date

Particulars

Debit ($)

Credit ($)

Jan 1

Cash

34,000

Common Stock

34,000

(Cash invested by the owner)

Jan 2

Medical Supplies

17,000

Accounts payable

17,000

(Medical supplies are purchased)

Jan 4

Cash

1,600

Service Revenue

1,600

(Service revenue received)

Jan 12

Rent Expense

3,000

Cash

3,000

(Rent expenses paid in cash)

Jan 15

Accounts Receivables

7,000

Service Revenue

7,000

(Services provided on credits)

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

  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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