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Ken Jones, an architect, organized Jones Architects on April 1, 20Y2. During the month, Jones Architects completed the following transactions:

a. Transferred cash from a personal bank account to an account to be used for the business in exchange for Common Stock, $48,200.
b. Purchased used automobile for $31,000, paying $7,200 cash and giving a note payable for the remainder.
c. Paid April rent for office and workroom, $4,800. Paid cash for supplies, $2,310.
d. Purchased office and computer equipment on account, $9,600.
e. Paid cash for annual insurance policies on automobile and equipment, $3,200.
f. Received cash from a client for plans delivered, $12,100.
g. Paid cash to creditors on account, $2,800.
h. Paid cash for miscellaneous expenses, $375.
i. Received invoice for blueprint service, due in May, $1,600.
j. Recorded fees earned on plans delivered, payment to be received in May, $8,300.
k. Paid salary of assistant, $2,600. Paid cash for miscellaneous expenses, $1,300.
l. Paid installment due on note payable, $390.
m. Paid gas, oil, and repairs on automobile for April, $630.

Required:
Record the above transactions.

Sagot :

Answer:

See the journal entries below.

Explanation:

The transactions can be recorded as follows:

Ken Jones

Journal Entries of Transactions

For April 1, 20Y2

Event    Account Tile and Explanation          Debit ($)         Credit ($)  

a.            Cash                                                   48,200

                Common Stock                                                         48,200

              (To record cash transferred in exchange for Common Stock.)  

b.             Automobile                                       31,000

                 Cash                                                                            7,200

                 Note payable                                                            23,800

               (To record purchase of used automobile.)                                  

c(1).           Rent expense                                   4,800

                  Cash                                                                           4,800

                (To record office and workroom rent paid.)                                  

c(2).         Supplies                                              2,310

                 Cash                                                                             2,310

                (To record cash paid for supplies.)                                              

d.             Office and computer equipment     9,600

                  Accounts payable                                                      9,600

                (To record office and computer equipment purchased on account.)

e(1.)           Prepaid insurance                           3,200

                  Cash                                                                            3,200

                (To record annual insurance policies on automobile and equipment paid.)  

e(2.)           Insurance expense (3,200 /12)         267

                    Prepaid insurance                                                       267

                  (To record insurance expense for April.)                                  

f.                 Cash                                                12,100

                    Service fees revenue                                               12,100

                   (To record cash received from a client for plans delivered.)  

g.                Accounts payable                          2,800

                       Cash                                                                       2,800

                   (To record cash paid to creditors on account.)                          

h.                Miscellaneous expenses                    375

                    Cash                                                                              375

                  (To record cash pad for miscellaneous expenses.)                      

j.                 Accounts receivable                         8,300

                     Service fees revenue                                              8,300

                   (To record fees earned on plans delivered.)                                

k(1.)             Salary expense                                 2,600

                    Cash                                                                           2,600

                  (To record salary of assistant paid.)                                              

k(2.)            Miscellaneous expenses                  1,300

                     Cash                                                                           1,300

                   (To record cash paid for miscellaneous expenses.)                  

l.                 Note payable                                       390

                    Cash                                                                              390

                  (To record installment due on note payable paid.)                      

m.               Gas, oil, and repairs expenses           630

                     Cash                                                                             630

                  (To record gas, oil, and repairs on automobile paid for April.)    

Note: Transaction number i is not recorded because it does not relate to April but May. It will therefore be recorded in May 20Y2.

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