The company paid $3,150 cash for the premium on a 12-month insurance policy. Cov
ID: 2456658 • Letter: T
Question
The company paid $3,150 cash for the premium on a 12-month insurance policy. Coverage begins on April 11.
The company collected $14,500 cash on commissions from airlines on tickets obtained for customers.
rev: 01_12_2015_QC_CS-3714
1.
Required information
The general ledger and all the necessary accounts are provided in Part 6.2. Post all journal entries, adjusting entries and closing entries to the general ledger given in Part 6.2
April 1, 2013, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company’s first month.Explanation / Answer
1. Journal Entries
Date Particulars Debit ($) Credit ($) april 1 Investment in common stock A/c Dr 76000 To Cash A/c 43000 To Computer equipment 33000 april 2 Rent expense A/c Dr. 3100 To Cash A/c 3100 april 3 office supplies 2300 To cash A/c 2300 april 10 Prepaid Insurance A/c Dr. 3150 To Cash A/c 3150 april 14 Salaries Expenses 2900 To cash A/c 2900 april 24 Cash A/c Dr. 14500 To commission earned 14500 april 28 Salaries A/c Dr. 2900 To Cash A/c 2900 april 29 Repair expenses A/c 800 To cash A/c 800 april 30 Telephone expenses A/c Dr. 1100 To cash A/c 1100 april 30 Dividends A/c Dr. 2800 To Cash A/c 2800 april 30 Depreciation Expense—Computer Equip 1150 To Accumulated Depreciation—Computer Equip. 1150 april 30 Salaries expense A/c Dr. 550 To salaries payable 550 april 30 Account recieable 3050 To commissions earned 3050 april 30 Insurance Expense A/c Dr. 175 To prepaid insurance A/c 175 april 30 Office supplies expense 1050 To Office supplies 1050