Question

Duy TURPlactice Sea Chapter 3, Problem 12E Bookmark Show all steps: Problem Elaine Consulting incorporated on February 1, current year. The company engaged in the following transactions during its first month of operations. Feb. 1 Issued capital stock in exchange for $800,000 cash. Feb. 5 Borrowed $100,000 from the bank by issuing a note payable. Feb. 8 Purchased land, building, and office equipment for $750,000. The value of the land was $150,000, the value of the building was $340,000, and the value of the office equip ment was $60,000. The company paid $200,000 cash and issued a note payable for the balance. Feb. 11 Purchased office supplies for $800 on account. The supplies will last for several months. Feb. 14 Paid the local newspaper $500 for a full-page advertisement. The ad will appear in print on February 18. Feb. 20 Several of the inkjet printer cartridges that Elaine purchased on February 11 were defective. The cartridges were returned and the office supply store reduced Elaine's outstanding balance by $200. Feb. 22 Performed consulting services for $14,000 cash. Feb. 24 Billed clients $16,000. Feb. 25 Paid salaries of $12,000. Feb. 28 Paid the entire outstanding balance owed for office supplies purchased on February 11. A partial list of the account titles used by the company includes the following Cash Notes Payable Accounts Receivable Accounts Payable Office Supplies Capital Stock Land Client Service Revenue Building Advertising Expense Office Equipment Salaries Expense a. Prepare journal entries, including explanations, for these transactions b. Post each entry to the appropriate ledger accounts (use the T account format as illustrated in
part A

Answer 1

Journal Entries Date Account Title and Explaination Debit Credit Post. Ref. Feb.1 800,000.00 Cash Capital Stock (To record Capital Stock issued for Cash) 800,000.00 Feb.5 $ 100,000.00 Cash Note Payable (To record borrowed throught Note Pavable) 100,000.00 Feb.8 150,000.00 540,000.00 60,000.00 Land Building Office Equipment Cash Note Payable |(To record purchase of Land, Building, Office Equipment) A 200,000.00 550,000.00 SA Feb.11 800.00 Office Supplies Accounts Payable (To record office Supplies purchased on account) 800.00

Feb.14 500.00 Advertising Expense Cash (To record advertising expenses paid) 500.00 Feb.20 200.00 Accounts Payable Office Supplies (To record return of some office supplies) 200.00 Feb.22 14,000.00 Cash Client Service Revenue (To record service performed for cash) 14,000.00 Feb.24 16,000.00 Accounts Receivable Client Service Revenue (To record service performed on account) $ 16,000.00 Feb.25 Salaries Expense 12,000.00 Cash 12,000.00 (To record Salaries paid) Feb.28 600.00 Accounts Payable Cash (To record payment of payables) 600.00