Question

The transactions of Spade Company appear below.
a. Kacy Spade, owner, invested $100,750 cash in the company in exchange for common
stock.
b. The company purchased office supplies for $1,250. cash.
c. The company purchased $10,050 of office equipment on credit.
d. The company received $15,500 cash as fees for services provided to a customer.
e. The company paid $10,050 cash to settle the payable for the office equipment
purchased in transaction c.
f. The company billed a customer $2,700 as fees for services provided.
g. The company paid $1,225 cash for the monthly rent.
h. The company collected $1,125 cash as partial payment for the account receivable created
in transaction f
i. The company paid a $10,000 cash dividend to the owner (sole shareholder).
Required:
1. 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.
2. Post the above journal entries to T-accounts, which serve as the general ledger for this
assignment.

Answer 1

Solution:

Requirement 1: Journal Entries

Transaction	General Journal	Debit	Credit
a	Cash	$      100,750
	Common Stock		$     100,750
	(Being common stock issued)
b	Office Supplies	$          1,250
	Cash		$          1,250
	[ Being supplies purchased]
c	Office Equipment	$        10,050
	Accounts payable		$        10,050
	( Being equipment purchased)
d	Cash	$        15,500
	Fees Earned		$        15,500
	( Being service revenue earned)
e	Account Payable	$        10,050
	Cash		$        10,050
	(Being account payable paid)
f	Account Receivable	$          2,700
	Fees Earned		$          2,700
	( Being service revenue earned)
g	Rent Expense	$          1,225
	Cash		$          1,225
	(Being rent expense paid)
h	Cash	$          1,125
	Account Receivable		$          1,125
	( Being cash received on receivables)
i	Dividends	$        10,000
	Cash		$        10,000
	(Being dividend paid)

Requirement 2: T-Accounts

Cash
a	$     100,750	b	$                1,250
d	$        15,500	e	$             10,050
h	$          1,125	g	$                1,225
		i	$             10,000
End Balance	$        94,850
Common Stock
		a	$           100,750
		End Balance	$           100,750
Fees Earned
		d	$             15,500
		f	$                2,700
		End Balance	$             18,200
Accounts Receivable
f	$          2,700	h	$                1,125
End Balance	$          1,575
Office Equipment
c	$        10,050
End Balance	$        10,050
Office Supplies
b	$          1,250
End Balance	$          1,250
Account Payable
e	$        10,050	c	$             10,050
		End Balance	$                       -
Rent Expense
g	$          1,225
End Balance	$          1,225
Dividends
i	$        10,000
End Balance	$        10,000