Question

Transactions for the Sandhill Company for the month of November are presented below.

a. Stockholders invested an additional $36,000 cash in the business.
b. Purchased land costing $17,000 for cash.
c. Purchased equipment costing $54,000 for $4,500 cash and the remainder on credit.
d. Purchased supplies on account for $800. 5. Paid $3,200 for a one-year insurance policy.
e. Received $2,800 cash for services performed.
f. Received $6,600 for services previously performed on account.
g. Paid wages to employees for $2,400.
h. Paid dividends to stockholders of $600.

Requried:
Journalize each transaction and identify each transaction by number.

Answer 1

Part a.

Debit : Cash $36,000

Credit : Common Stock $36,000

Part b.

Debit : Land $17,000

Credit : Cash $17,000

Part c.

Debit : Equipment $54,000

Credit : Cash $4,500

Credit : Accounts Payable $49,500

Part d.

Debit : Supplies $800

Credit : Accounts Payable $800

Item 5

Debit : Prepaid Insurance $3,200

Credit : Cash $3,200

Part e.

Debit : Cash $2,800

Credit : Service Revenue $2,800

Part f.

Debit : Cash $6,600

Credit : Accounts Receivable $6,600

Part g.

Debit : Wages $2,400

Credit : Cash $2,400

Part h.

Debit : Dividends $600

Credit : Cash $600

Step-by-step explanation:

The first step is to identify the accounts affected by the transaction (usually more than2). Then record the transactions in journal as above.