Question

Journalize the transactions of Lawrence Engineering. Include an explanation with each journal entry. Use the following accounts: Cash; Accounts Receivable; Office Supplies; Equipment; Accounts Payable; Notes Payable; Common Stock: Dividends; Service Revenue; and Utilities Expense.

Jul. 2 Received $14,000 contribution from Brett Lawrence in exchange for common stock.
4 Paid utility expense of $370.
5 Purchased equipment on account, $1,600.
10 Performed services for a client on account, $2,900.
12 Borowed $7,100 cash, signing a note payable.
19 Cash dividends of $200 were paid to stockholders.
21 Purchased office supplies for $840 and paid cash.
27 Paid the liability from July 5.

Answer 1

The journal entries for Lawrence Engineering include transactions such as receiving contributions, paying expenses, purchasing equipment, performing services, borrowing cash, paying dividends, and buying office supplies.

Step-by-step explanation:

1. July 2: Cash $14,000 (debit); Common Stock $14,000 (credit)
   Explanation: Received $14,000 contribution from Brett Lawrence in exchange for common stock.
2. July 4: Utilities Expense $370 (debit); Cash $370 (credit)
   Explanation: Paid utility expense of $370.
3. July 5: Equipment $1,600 (debit); Accounts Payable $1,600 (credit)
   Explanation: Purchased equipment on account for $1,600.
4. July 10: Accounts Receivable $2,900 (debit); Service Revenue $2,900 (credit)
   Explanation: Performed services for a client on account for $2,900.
5. July 12: Cash $7,100 (debit); Notes Payable $7,100 (credit)
   Explanation: Borrowed $7,100 cash, signing a note payable.
6. July 19: Dividends $200 (debit); Cash $200 (credit)
   Explanation: Paid cash dividends of $200 to stockholders.
7. July 21: Office Supplies $840 (debit); Cash $840 (credit)
   Explanation: Purchased office supplies for $840 and paid cash.
8. July 27: Accounts Payable $1,600 (debit); Cash $1,600 (credit)
   Explanation: Paid the liability from July 5.

Answer 2

The Journal entries are as follows:

(i) On July 2,

Cash A/c Dr. $14,000

To common stock $14,000

(To record the common stock)

(ii) Only July 4,

Utility expenses A/c Dr. $370

To cash A/c $370

(To record the utility expenses paid)

(iii) Only July 5,

Equipment A/c Dr. $1,600

To accounts payable A/c $1,600

(To record equipment purchased on account)

(iv) Only July 10,

Account receivables A/c Dr. $2,900

To service revenue A/c $2,900

(To record Performed services for a client on account)

(v) Only July 12,

Cash A/c Dr. $7,100

To notes payable $7,100

(To record the borrowed cash on notes payable)

(vi) Only July 19,

Dividend A/c Dr. $200

To cash $200

(To record cash dividend paid to stockholders)

(vii) Only July 21,

Office supplies A/c Dr. $840

To cash $840

(To record office supplies paid cash)

(viii) Only July 27,

Accounts payable A/c Dr. $1,600

To cash $1,600

(To record the liability paid)