May 1 Invested $20,000 cash in the golf course business. May 3 Purchased Hampste
ID: 2355354 • Letter: M
Question
May 1 Invested $20,000 cash in the golf course business. May 3 Purchased Hampstead Golf Land for $15,000 cash. The price includes land $12,000, shed $2,000, and equipment $1,000. May 5 Paid advertising expenses of $700. May 6 Paid cash $600 for a one-year insurance policy. May 10 Purchased golf discs and other equipment for $1,050 from Discs Are Us payable in 30 days. May 18 Received $1,100 in cash for golf fees earned (service revenue). May 19 Sold 150 coupon books for $10 each. Each book contains four coupons that enable the holder to play one round of disc golf. May 25 Withdrew $800 cash for personal use. May 30 Pay $250 as salaries for part-time employees. May 30 Paid Discs Are Us the full amount due. May 31 Received $2,100 cash for fees earned. Accounts used:Explanation / Answer
The journal entries for the above question are as follows: May 1 Cash A/c Dr $20,000 To Owner'sCapital A/c $20,000 (Being cash invested in golf course business) May 3 Land A/c Dr $12,000 Building(shed) A/c Dr $2,000 Equipment A/c Dr $1,000 To Cash A/c $15,000 (Being land,shed and equipment assets purchased for cash) May 5 Advertising Expense A/c Dr $700 To Cash A/c $700 (Being advertisement expenses paid) May 6 Prepaid Insurance A/c Dr $600 To Cash A/c $600 (Being Insurance paid in advance) May 10 Equipment A/c Dr $1,050 To Accounts Payable $1,050 (Being assets purchased on credit from Discs Are Us) May 18 Cash A/c Dr $1,100 To Service Revenue $1,100 (Being golf fees earned received) May 19 Cash A/c Dr $1,500 To Service revenue $1,500 (Being 150 coupon books sold @ $10 each) May 25 Owner's Drawings A/c Dr $800 To Cash A/c $800 (Being cash withdrawn for personal use) May 30 Salaries and wages Expense A/c Dr $250 To cash A/c $250 (Being salaries paid ) May 30 Accounts Payable A/c Dr $1,050 To Cash A/c $1,050 (Being cash paid to Discs Are Us) May 31 Cash A/c Dr $2,100 To Unearned Service revenue $ 2,100 (Being cash received on services rendered earlier)