Question

Katy Williams is the manager of Blue Light Arcade. The company provides entertainment for parties and special events.

a. Blue Light Arcade received $58 cash on account for a birthday party held two months ago.
b. Agreed to hire a new employee at a monthly salary of $3,250. The employee starts work next month.
c. Paid $2,250 for a table top hockey game purchased last month on account.
d. Repaid a $5,250 bank loan that had been outstanding for six months. (Ignore interest.)
e. The company purchased an air hockey table for $3,200, paying $1,500 cash and signing a short-term note for $1,700.
Prepare journal entries for the above transactions relating to the year ended December 31. (If no entry is required for a transaction/event select "No Journal Entry Required" in the first account field.)
A) Blue Light Arcade received $58 cash on account for a birthday party held two months ago. Record the transaction.
B) Agreed to hire a new employee at a monthly salary of $3,250. The employee starts work next month. Record the transaction.
C) Paid $2,250 for a table top hockey game purchased last month on account. Record the transaction.
D) Repaid a $5,250 bank loan that had been outstanding for six months. (Ignore interest.) Record the transaction.
E) The company purchased an air hockey table for $3,200, paying $1,500 cash and signing a short-term note for $1,700. Record the transaction.

Answer 1

Answer: Please see explanation column for answers

Step-by-step explanation:

a) For cash on account for a birthday party held two months ago

Accounts titles and Explanation Debit Credit

Cash $58

Accounts Receivables $ 58

b.

No Journal Entry Required

This is because transaction or payment for salary intends to start next month

c. Entry to record amount for a table top hockey game purchased last month on account)

Accounts titles and Explanation Debit Credit

Accounts Payable $ 2,250

Cash $ 2,250

d.

Entry to record repaid bank loan that had been outstanding for six months.

Accounts titles and Explanation Debit Credit

Bank Loan Payable $ 5,250

Cash $5,250

e.Entry to record purchase of air hockey table for $3,200, paying $1,500 cash and signing a short-term note for $1,700

Accounts titles and Explanation Debit Credit

Equipment $ 3,200

Cash $ 1,500

Note Payable $1,700