Prepare the journal entry to document this transaction. Dates and descriptions a
ID: 2424304 • Letter: P
Question
Prepare the journal entry to document this transaction. Dates and descriptions are not required.
1. Paid $20,000 for stock in a newly formed corporation.
2. Purchased photocopier for $5000 on account.
3. Bought office supplies for immediate consumption for $200 cash
4. Billed customer $3500 for services performed
5. Customer paid $2,000 on account.
6. Prepaid insurance account has a $2,400 balance for a twelve-month premium. Month one has ended.
7. Office supplies on hand account has a balance of $1,955, and a physical count reveals that there are $715 worth of supplies remaining at month end.
8. A customer had previously paid $500 in advance on an order. The order has now been shipped FOB destination.
9. Sales tax of $100 is collected from a customer to be remitted to the state at a later date.
10. At month end, $2,300 of wages are due to employees but not yet paid.
Explanation / Answer
No. Account Titles Debit Credit $ $ 1. Cash 20,000 Common stock 20,000 2 . Photocopier 5,000 Accounts payable 5,000 3. Office supplies 200 Cash 200 4. Accounts receivable 3,500 Service revenues 3,500 5. Cash 2,000 Accounts receivable 2,000 6. Insurance expense 200 Prepaid insurance 200 7. Office supplies expense 1,440 Office supplies 1,440 8. Advance 500 Goods in transit 500 9. Cash 100 Sales tax payable 100 10. Wage expense 2,300 Wage expense payable 2,300