Question

The May transactions of Pronghorn Corp were as follows. May 4 Paid $820 due for supplies previously purchased on account. 7 Performed advisory services on account for $6,870. 8 Purchased supplies for $890 on account. 9 Purchased equipment for $2.130 in cash. 17 Paid employees $510 in cash. 22 Received bill for equipment repairs of $850. 29 Paid $1,190 for 12 months of insurance policy. Coverage begins June 1. Journalize the transactions. (If no entry is required, select "No Entry" for the account titles and enter for the amounts. Credit account titles are automatically indented when amount is entered. Do not Indent manually. Record Journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit | >

Answer 1

Journal entries for Pronghorn Corp's May transactions involve recording payments for liabilities, purchasing supplies and equipment, recognizing revenues, and prepaying for an insurance policy. Each transaction is recorded with corresponding debit and credit entries in accordance with double-entry accounting principles.

Step-by-step explanation:

The scenario provided involves several transactions that need to be journalized for Pronghorn Corp. Given the transactions, we can create the journal entries as follows:

1. May 4: Debit Accounts Payable $820, Credit Cash $820. Description: Paid on account.
2. May 7: Debit Accounts Receivable $6,870, Credit Service Revenue $6,870. Description: Performed advisory services on account.
3. May 8: Debit Supplies $890, Credit Accounts Payable $890. Description: Purchased supplies on account.
4. May 9: Debit Equipment $2,130, Credit Cash $2,130. Description: Purchased equipment with cash.
5. May 17: Debit Wages Expense $510, Credit Cash $510. Description: Paid employees.
6. May 22: Debit Equipment Repair Expense $850, Credit Accounts Payable $850. Description: Received bill for equipment repairs.
7. May 29: Debit Prepaid Insurance $1,190, Credit Cash $1,190. Description: Payment for insurance policy coverage starting June 1.

Note that the journal entries reflect standard double-entry accounting, with debit entries accounting for assets and expenses, and credit entries reflecting liabilities, equity, or income.