Final answer:
To prepare the journal entries for the given transactions, analyze each transaction and identify the accounts affected. Debit and credit the appropriate accounts based on the nature of the transaction.
Step-by-step explanation:
To prepare the journal entries for the given transactions, we need to analyze each transaction and identify the accounts affected.
1. T. James, owner, invested $11,000 cash in Sustain Company:
Debit: Cash - $11,000
Credit: Capital - $11,000
2. The company purchased $4,000 of furniture on credit:
Debit: Furniture - $4,000
Credit: Accounts Payable - $4,000
3. The company paid $600 cash for a 12-month prepaid insurance policy:
Debit: Prepaid Insurance - $600
Credit: Cash - $600
4. The company billed a customer $3,000 for sustainability services provided:
Debit: Accounts Receivable - $3,000
Credit: Service Revenue - $3,000
5. The company paid $4,000 cash toward the payable from the furniture purchase:
Debit: Accounts Payable - $4,000
Credit: Cash - $4,000
6. The company collected $3,000 cash for services billed:
Debit: Cash - $3,000
Credit: Accounts Receivable - $3,000
7. T. James invested an additional $10,000 cash in Sustain Company:
Debit: Cash - $10,000
Credit: Capital - $10,000
8. The company received $5,000 cash in advance of providing sustainability services:
Debit: Cash - $5,000
Credit: Unearned Revenue - $5,000