Question

E3-17 Preparing Journal Entries [LO 3-3] In January, Tongo, Inc., a branding consultant, had the following transactions. a. Received $9,500 cash for consulting services rendered in January b.Issued common stock to investors for $10,000 cash. e Purchased $12,000 of equipment, paying 25 percent in cash and owing the rest on a note due in 2 years. d. Received $7,500 cash for consulting services to be performed in February e Bought and received $1000 of supplies on account. f Received utility bill for January for $1.250, due February 15. 9. Consulted for customers in January for fees totaling $15,900, due in February h Received $12,000 cash for consulting services rendered in December Paid $500 toward supplies purchased in (e). Prepare the journal entry for each of the above transactions. (If no entry is required for a transaction/event, select "No Journal En Required in the first account field.)

Answer 1

Solution:

a. Received $9,500 cash for consulting services rendered in January.

Transaction	General Journal	Debit	Credit
a	Cash	9500
	Service Revenue		9500

b. Issued stock to investors for $10,000 cash.

Transaction	General Journal	Debit	Credit
b	Cash	10000
	Contributed capital		10000

c. Purchased $12,000 of equipment, paying 25 percent in cash and owing the rest on a note due in 2years.

Transaction	General Journal	Debit	Credit
c	Equipment	12000
	Notes payable (long term)		9000
	Cash		3000

d. Received $7,500 cash for consulting services to be performed in February.

Transaction	General Journal	Debit	Credit
d	Cash	7500
	Service Revenue		7500

e. Bought $1,000 of supplies on account.

Transaction	General Journal	Debit	Credit
e	Supplies	1000
	Accounts payable		1000

f. Received utility bill for January for $1,250, due February 15.

Transaction	General Journal	Debit	Credit
f	Utilities Expense	1250
	Accounts payable		1250

g. Consulted for customers in January for fees totalling $15,900, due in February15.

Transaction	General Journal	Debit	Credit
g	Accounts receivable	15900
	Service revenue		15900

h. Received $12,000 cash for consulting services rendered in December.

Transaction	General Journal	Debit	Credit
h	Cash	12000
	Revenue		12000

i. Paid $500 toward supplies purchased in(e).

Transaction	General Journal	Debit	Credit
i	Accounts payable	500
	Cash		500