Question

April 1 Randy Smith invested $14,000 cash to begin the business; he received common stock for his investment. 2 Paid six months' lease on a van, $2,850. 3 Borrowed $10,000 from a bank and signed a note payable agreeing to repay the $10,000 in one year plus 10 percent interest. 3 Purchased $5,500 of cleaning equipment; paid $2,000 down with the remainder due within 30 days. 4 Purchased cleaning supplies for $4,300 cash. 7 Paid $350 for newspaper advertisements to run during April. 21 Billed customers for services, $3,500. 23 Paid $1,500 on account to cleaning equipment firm (see April 3 transaction). 28 Collected $2,300 from customers on account. 29 Randy Smith received a $1,000 cash dividend. 30 Paid wages for April, $1,750. 30 Paid service station for gasoline used during April, $350. Accounting Equation Journal Entries b. Use journal entries to record the transactions for April in the general journal. Date Description April 1 Debit Credit $ 0$ 0 0 Owner purchased common stock for cash. Paid six months' lease on van. Borrowed money from bank for one year, interest rate of 10%. Cash 0 Purchased equipment, made down payment with balance due in 30 days. Purchased supplies for cash. 0 Paid for April advertising. Oo oo oo oo oo oo oo oo ooo oo oo Billed customers for services. 23 Payment on account. Collections from customer on account. 29 Shareholders are paid a cash dividend. Paid wages for April. 30 Paid for gasoline used in April.

Answer 1

Answer:

b. In the books of Thoro Clean :

Date	Account Titles	Debit	Credit
		$	$
April 1	Cash	14,000
	Common Stock		14,000
	owner purchased common stock for cash
April 2	Prepaid Van Lease	2,850
	Cash		2,850
	paid six months lease on van
April 3	Cash	10,000
	Notes Payable		10,000
	borrowed money from bankfor one year, interest rate of 10%
April 3	Equipment	5,500
	Cash		2,000
	Accounts Payable		3,500
	purchased equipment made down payment withbalance due in 30 days
April 4	Supplies	4,300
	Cash		4,300
	purchased supplies for cash
April 7	Advertising Expense	350
	Cash		350
	paid for april advertising
April 21	Accounts Receivable	3,500
	Cleaning Fees Earned		3,500
	billed customers for services
April 23	Accounts Payable	1,500
	Cash		1,500
	payment on account
April 28	Cash	2,300
	Accounts Receivable		2,300
	collections from customers from account
April 29	Dividends	1,000
	Cash		1,000
	shareholders are paid a cash dividend
April 30	Wage Expense	1,750
	Cash		1,750
	paid wages for april
April 30	Fuel Expense	350
	Cash		350
	paid for gasoline used in april

Answer 2

Cash 14000 Investment..14000