Question

The transactions of Spade Company appear below.

A. Kacy Spade, owner, invested $100,750 cash in the company.
B. The company purchased $10,050 of office equipment on credit.
C. The company paid $10,050 cash to settle the payable for the office equipment purchased in transaction b.
D. The company billed a customer $2,700 as fees for services provided.
E. The company paid $1,225 cash for the monthly rent.
F. The company collected $1,125 cash as partial payment for the account receivable created in transaction.
Required:
1. Prepare general journal entries to record the transactions above for Spade Company by using the following accounts: Cash; Accounts Receivable; Office Supplies; Office Equipment; Accounts Payable; K. Spade, Capital; K. Spade, Withdrawals; Fees Earned; and Rent Expense. Use the letters beside each transaction to identify entries.
2. Post the above journal entries to T-accounts, which serve as the general ledger for this assignment.

Answer 1

Required 1 : General journal entries

A.

Cash $100,750 (debit)

Capital ; K. Spade $100,750 (credit)

B.

Office Equipment $10,050 (debit)

Trade Payable $10,050 (credit)

C.

Trade Payable $10,050 (debit)

Cash $10,050 (credit)

D.

Trade Receivable $2,700 (debit)

Fees Earned $2,700 (credit)

E.

Rent Expense $1,225 (debit)

Cash $1,225 (credit)

F.

Cash $1,125 (debit)

Trade Receivable $1,125 (credit)

Required 2 : Posting Journal Entries to T - Accounts

Cash Account

Debit

Capital ; K. Spade $100,750

Trade Receivable $1,125

Totals $101,875

Credit

Trade Payable $10,050

Rent Expense $1,225

Balance c/d $90,600

Totals $101,875

Capital Account

Debit

Balance c/d $100,750

Totals $100,750

Credit

Cash $100,750

Totals $100,750

Office Equipment Account

Debit

Trade Payable $10,050

Totals $10,050

Credit

Balance c/d $10,050

Totals $10,050

Trade Payable Account

Debit

Cash $10,050

Totals $10,050

Credit

Office Equipment $10,050

Totals $10,050

Trade Receivable Account

Debit

Fees Earned $2,700

Totals $2,700

Credit

Cash $1,125

Balance c/d $1,575

Totals $2,700

Rent Expense Account

Debit

Cash $1,225

Totals $1,225

Credit

Profit and Loss Account $1,225

Totals $1,225

Fees Earned Account

Debit

Trading Account $2,700

Totals $2,700

Credit

Trade Receivable $2,700

Totals $2,700

Step-by-step explanation:

All transaction are first record in the journal. Be careful to use the account titles provided by the question.

The Posting to general account is the second stage in accounting. Here account balances to be transferred into the trial balance are established.