Question

Quick Cleaners, Inc. (QCI), has been in business for several years. It specializes in cleaning houses but has some small business clients as well.

a. Issued $21,000 of QCI stock for cash.
b. Incurred $840 of utilities costs this month and will pay them next month.
c. Paid wages for the current month, totaling $2,600.
d. Performed cleaning services on account worth $3,800.
e. Some of Quick Cleaners’ equipment was repaired at a total cost of $300. The company paid the full amount at the time the repair work was done.

Required:
Prepare journal entries for the above transactions, which occurred during a recent month.

Answer 1

Quick Cleaners, Inc. (QCI)

Journal Entries

a. Debit Cash $21,000

Credit Common Stock $21,000

To record the issuance of QCI stock for cash.

b. Debit Utilities Expense $840

Credit Utilities Payable $840

To accrue utilities expense for the month.

c. Debit Wages Expense $2,600

Credit Cash $2,600

To record the payment of wages for the month.

d. Debit Accounts Receivable $3,800

Credit Service Revenue $3,800

To record the performance of cleaning services on account.

e. Debit Equipment Repairs $300

Credit Cash $300

To record the payment for equipment repairs.

Step-by-step explanation:

a) Data and Analysis:

a. Cash $21,000 Common Stock $21,000

b. Utilities Expense $840 Utilities Payable $840

c. Wages Expense $2,600 Cash $2,800

d. Accounts Receivable $3,800 Service Revenue $3,800

e. Equipment Repairs $300 Cash $300