Monroe Company rents and sells electronic equipment. During September, Monroe en

Question

Monroe Company rents and sells electronic equipment. During September, Monroe engaged in the transactions described below.

Paid a $4,350 cash dividend to stockholders.

Required:

Prepare a journal entry for each transaction.

Sept. 5 Purchased a Chevrolet truck for $42,500 cash. 8 Purchased inventory for $4,400 on account. 10 Purchased $950 of office supplies on credit. 11 Rented sound equipment to a traveling stage play for $12,800. The producer of the play paid for the service at the time it was provided. 12 Rented sound equipment and lights to a local student organization for a school dance for $2,800. The student organization will pay for services within 30 days. 18 Paid employee wages of $4,170 that have been earned during September. 22 Collected the receivable from the September 12 transaction. 23 Borrowed $14,100 cash from a bank on a 3-year note payable. 28 Issued common stock to new stockholders for $40,000. 30

Paid a $4,350 cash dividend to stockholders.

Required:

Prepare a journal entry for each transaction.

Explanation / Answer

Solution:

Journal Entries - Monroe Company Date Particulars Debit Credit 5-Sep Truck Dr $42,500.00                To Cash $42,500.00 (To record purchase of truck) 8-Sep Inventory Dr $4,400.00                To Accounts Payable $4,400.00 (To record purchase of inventory on account) 10-Sep Office Supplies Dr $950.00                To Accounts Payable $950.00 (To record purchase of office supplies on account) 11-Sep Cash Dr $12,800.00                To Rent Revenue $12,800.00 (To record revenue from renting of sound equipment) 12-Sep Accounts Receivables Dr $2,800.00                To Rent Revenue $2,800.00 (To record revenue from renting of sound equipment) 18-Sep Salaries and Wage Expense Dr $4,170.00                To Cash $4,170.00 (To record payment of employee salary) 22-Sep Cash Dr $2,800.00                To Accounts receivables $2,800.00 (To record collection of receivables) 23-Sep Cash Dr $14,100.00                To Note Payable $14,100.00 (To record borrowing by issuing note) 28-Sep Cash Dr $40,000.00                To Common Stock $40,000.00 (To record issue of shares) 30-Sep Dividend Dr $4,350.00                To Cash $4,350.00 (To record payment of dividends)

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