Question

Transactions for Mehta Company for the month of May are presented below.

Prepare journal entries for each of these transactions. (You may omit explanations.)
May 1 B.D. Mehta invests $4,000 cash in exchange for common stock in a small welding corporation.
3 Buys equipment on account for $1,100.
13 Pays $400 to landlord for May rent.
21 Bills Noble Corp. $500 for welding work done.

Answer 1

MEHTA COMPANY

Date Account Titles and Explanation Debit Credit

1-May Cash $4,000

Common stock $4,000

(To record capital investment)

Date Account Titles and Explanation Debit Credit

3 May Equipment $1,100

Account payable $1,100

(To record the purchase of equipment on account)

Date Account Titles and Explanation Debit Credit

13 May Rent expenses $400

Cash $400

(To record rent expenses)

Date Account Titles and Explanation Debit Credit

21 May Account receivable $500

Service revenue $500

(To record service revenue)