Question

Terrapin Company engages in the following external transactions for November. Purchase equipment in exchange for cash of $22,400. Provide services to customers and receive cash of $6,000. Pay the current month's rent of $1,700. Purchase office supplies on account for $1,000. Pay employee salaries of $1,700 for the current month. Required: Record the transactions. Terrapin uses the following accounts: Cash, Supplies, Equipment, Accounts Payable, Service Revenue, Rent Expense, and Salaries Expense.

Answer 1

Transactions for the Terrapin Company are recorded using debit and credit entries affecting equipment, cash, service revenue, rent expense, supplies, accounts payable, and salaries expense.

Step-by-step explanation:

To record the external transactions for the Terrapin Company, we use debit and credit accounting as follows:

• Purchase equipment for cash: Debit Equipment $22,400, Credit Cash $22,400.
• Provide services and receive cash: Debit Cash $6,000, Credit Service Revenue $6,000.
• Pay rent for the current month: Debit Rent Expense $1,700, Credit Cash $1,700.
• Purchase office supplies on account: Debit Supplies $1,000, Credit Accounts Payable $1,000.
• Pay employee salaries for the current month: Debit Salaries Expense $1,700, Credit Cash $1,700.

These journal entries affect various accounts on the balance sheet and income statement, such as assets, liabilities, revenues, and expenses.

Answer 2

Purchase equipment in exchange for cash of $22,400

Debit Equipment account $22,400

Credit Cash account $22,400

Being entries to record the purchase of equipment for cash

Provide services to customers and receive cash of $6,000

Debit Cash account $6,000

Credit Service Revenue account $6,000

Being entries to recognize revenue earned from service rendered to customer.

Pay the current month's rent of $1,700

Debit Rent expense account $1,700

Credit Service Revenue account $1,700

Being entries to recognize the payment of rent expense.

Purchase office supplies on account for $1,000

Debit Supplies account $1,000

Credit Cash account $1,000

Being entries to recognize the payment for office supplies.

Pay employee salaries of $1,700 for the current month

Debit Salaries Expense account $1,700

Credit Cash account $1,700

Being entries to recognize the payment of employee's salaries.

Step-by-step explanation:

Information given about Terrapin

• Purchase equipment in exchange for cash of $22,400.
• Provide services to customers and receive cash of $6,000.
• Pay the current month's rent of $1,700.
• Purchase office supplies on account for $1,000.

• Pay employee salaries of $1,700 for the current month.

To record these transactions, the following entries will be posted

Purchase equipment in exchange for cash of $22,400

Debit Equipment account $22,400

Credit Cash account $22,400

Being entries to record the purchase of equipment for cash

Provide services to customers and receive cash of $6,000

Debit Cash account $6,000

Credit Service Revenue account $6,000

Being entries to recognize revenue earned from service rendered to customer.

Pay the current month's rent of $1,700

Debit Rent expense account $1,700

Credit Service Revenue account $1,700

Being entries to recognize the payment of rent expense.

Purchase office supplies on account for $1,000

Debit Supplies account $1,000

Credit Cash account $1,000

Being entries to recognize the payment for office supplies.

Pay employee salaries of $1,700 for the current month

Debit Salaries Expense account $1,700

Credit Cash account $1,700

Being entries to recognize the payment of employee's salaries.