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24 June, 02:03

Bearcat Construction begins operations in March and has the following transactions:

March 1 Issue common stock for $11,500.

March 5 Obtain $7,100 loan from the bank by signing a note.

March 10 Purchase construction equipment for $15,500 cash.

March 15 Purchase advertising for the current month for $1,100 cash.

March 22 Provide construction services for $16,100 on account.

March 27 Receive $11,100 cash on account from March 22 services.

March 28 Pay salaries for the current month of $4,100.

Required:

Record each transaction. The company uses the following accounts: Cash, Accounts Receivable, Equipment, Notes Payable, Common Stock, Service Revenue, Advertising Expense, and Salaries Expense. (If no entry is required for a transaction/event, enter "No Journal Entry Required" in the first account field.)

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  1. 24 June, 02:17
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    March 1 Issue common stock for $11,500.

    Debt Cash account $11,500

    Credit Common stock $11,500

    Being entries to record the receipt of cash from the issuance of stock

    March 5 Obtain $7,100 loan from the bank by signing a note.

    Debit Cash account $7,100

    Credit Note payable $7,100

    Being entries to record loan from bank

    March 10 Purchase construction equipment for $15,500 cash.

    Debit Fixed assets $15,500

    Credit Cash account $15,500

    Being entries to record the purchase of equipment

    March 15 Purchase advertising for the current month for $1,100 cash.

    Debit Advertising expense $1,100

    Credit Cash account $1,100

    Being entries to record advertising expense for the month

    March 22 Provide construction services for $16,100 on account.

    Debit Accounts receivable $16,100

    Credit Service Revenue $16,100

    Being entries to record the revenue from construction services

    March 27 Receive $11,100 cash on account from March 22 services.

    Debit Cash accounts $11,100

    Credit Accounts receivable $11,100

    Being entries to record cash collected

    March 28 Pay salaries for the current month of $4,100.

    Debit Salaries expense $4,100

    Credit Cash account $4,100

    Being entries to record salaries expense paid.

    Explanation:

    Assets are debited when there there is an increase. The same also applies to expense. Increase in liabilities, common stock and income are accounted for by posting a credit entry to the account affected.

    When assets decrease, credit entries are posted to it. The same also applies to expense. while debits to liabilities, equity and income is for a decrease in the account.
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Home » Business » Bearcat Construction begins operations in March and has the following transactions: March 1 Issue common stock for $11,500. March 5 Obtain $7,100 loan from the bank by signing a note. March 10 Purchase construction equipment for $15,500 cash.
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