Prepare journal entries for the following transactions. 1. Paid 1 year rent in a
ID: 2393430 • Letter: P
Question
Prepare journal entries for the following transactions.
1. Paid 1 year rent in advance for $2,000.
2. Hired a worker to be paid $500 per week, starting next week.
3. Purchased equipment for $3,000. Paid $800 in cash, and the remainder to be financed at $500/week.
4. Paid a worker the first weeks wages.
5. Received a bill of $150 to be paid on the first of the current month.
6. Issued stock valued at $35,000.
7. Paid a dividend of $10,000.
8. Received two months of services fees in advance in the amount of $3,000.
9. Purchased a 4-year insurance policy for $1000.
10. Billed a customer for the services that were performed, $2,000.
Explanation / Answer
the following are the journal entries:
sno accounts debit credit 1 Advance rent a/c $2,000 .............To cash a/c $2,000 2 no entry is entered on hiring of workers 3 Equipment a/c 3,000 ..............To cash a/c 800 ..............To accounts payable a/c 2,200 (amount of accounts payable = 3,000 - 800 =>2,200) 4 Salaries and wages expense a/c 500 ..............To Cash a/c 500 5 Utilities expense a/c 150 ................To Utilities expense payable a/c 150 6 cash a/c 35,000 ............To Common stock a/c 35,000 7 dividends a/c 10,000 ..................To cash a/c 10,000 8 Cash a/c 3000 ................To service revenue a/c 3000 9 prepaid insurance a/c 1000 . ...............To cash a/c 1000 10 accounts receivable a/c 2,000 . ..............To service revenue a/c 2,000