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2 October, 23:07

Kacy Spade, owner, invested $10,750 cash in the company in exchange for common stock. The company purchased office supplies for $312 cash. The company purchased $5,945 of office equipment on credit. The company received $1,268 cash as fees for services provided to a customer. The company paid $5,945 cash to settle the payable for the office equipment purchased in transaction c. The company billed a customer $2,279 as fees for services provided. The company paid $525 cash for the monthly rent. The company collected $957 cash as partial payment for the account receivable created in transaction f. The company paid a $900 cash dividend to the owner (sole shareholder).

Prepare general journal entries to record the transactions above for Spade Company by using the following accounts: Cash; Accounts Receivable; Office Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Fees Earned; and Rent Expense.

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  1. 2 October, 23:31
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    Accounts Debit ($) Credit ($)

    Cash 10,750

    Common Stock 10,750

    Being cash invested for common stock

    in the business

    Office Supplies 312

    Cash 312

    Being office supplies purchased with cash

    Office Equipment 5,945

    Account Payable 5,945

    Being office equipment purchased on credit

    Cash 1,268

    Fees Earned 1,268

    Being cash received on service rendered

    to a customer

    Account Payable 5,945

    Cash 5,945

    Being settlement of amount owned for

    office equipment

    Account receivable 2,279

    Fees Earned 2,279

    Being recognition of amount owned

    by customer

    Rent Expense 525

    Cash 525

    Being cash paid for rent

    Cash 957

    Account Receivable 927

    Being cash collected for account receivable

    Dividend 900

    Cash 900

    Being dividend paid with cash

    Explanation:

    Journal entry entries are used to record accounting effect of business transactions. General journal has two sides that make up debit and credit.

    Entries on the debit side are assets or expenses while entries on the credit sides are liabilities, equity and income.

    Journal also has a narration for each accounting event to provide information about the entry.
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