Question

This information relates to McCall Real Estate Agency.

Oct. 1 Stockholders invest $30,960 in exchange for common stock of the corporation.
2 Hires an administrative assistant at an annual salary of $39,960.
3 Buys office furniture for $3,630, on account.
6 Sells a house and lot for E. C. Roads; commissions due from Roads, $11,130 (not paid by Roads at this time).
10 Receives cash of $230 as commission for acting as rental agent renting an apartment.
27 Pays $640 on account for the office furniture purchased on October 3.
30 Pays the administrative assistant $3,330 in salary for October.


Journalize the transactions. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Answer 1

Journal entries for McCall Real Estate Agency are created for each financial transaction. They ensure accurate tracking of investments, furniture purchase, commission earnings, and expenditures like salary and furniture payments.

Step-by-step explanation:

Journalizing McCall Real Estate Agency Transactions

To journalize the given transactions for McCall Real Estate Agency, we will record each event as a debit and credit entry according to the principles of double-entry bookkeeping. Here are the transactions journalized:

1. Stockholders invest in common stock: Debit Cash $30,960, Credit Common Stock $30,960.
2. Hire administrative assistant: No immediate journal entry required as cost is incurred over time.
3. Purchase of office furniture: Debit Office Furniture $3,630, Credit Accounts Payable $3,630.
4. Commission due from E.C. Roads: Debit Accounts Receivable $11,130, Credit Service Revenue $11,130.
5. Commission received for renting an apartment: Debit Cash $230, Credit Service Revenue $230.
6. Payment on account for office furniture: Debit Accounts Payable $640, Credit Cash $640.
7. Salary payment to administrative assistant: Debit Salary Expense $3,330, Credit Cash $3,330.

These journal entries ensure that all business transactions are recorded correctly and the company's financial statements will accurately reflect its financial position for the period.