Question

Cheyenne Corp. has the following transactions during August of the current year.

Aug. 1 Issues shares of common stock to investors in exchange for $10,090.
4 Pays insurance in advance for 3 months, $1,270.
16 Receives $700 from clients for services rendered.
27 Pays the secretary $490 salary.

Required:
Journalize the transactions.

Answer 1

Aug-01

Dr Cash $ 10,090.00

Cr Common stock $ 10,090.00

Aug-04

Dr Prepaid insurance $ 1,270.00

Cr Cash $ 1,270.00

Aug-16

Dr Cash $ 700.00

Cr Service revenue $ 700.00

Aug-27

Dr Salaries expense $ 490.00

Cr Cash $ 490.00

Step-by-step explanation:

Preparation of the journal entries

Aug-01

Dr Cash $ 10,090.00

Cr Common stock $ 10,090.00

(To record issue of common stock)

Aug-04

Dr Prepaid insurance $ 1,270.00

Cr Cash $ 1,270.00

(To record payment for insurance)

Aug-16

Dr Cash $ 700.00

Cr Service revenue $ 700.00

(To record service revenue)

Aug-27

Dr Salaries expense $ 490.00

Cr Cash $ 490.00

(To record payment of salaries)