Question

On August 1, 20Y7, Rafael Masey established Planet Realty, which completed the following transactions during the month:

a. Rafael Masey transferred cash from a personal bank account to an account to be used for the business in exchange for Common Stock, $17,500.
b. Purchased supplies on account, $2,300.
c. Earned sales commissions, receiving cash, $13,300.
d. Paid rent on office and equipment for the month, $3,000.
e. Paid creditor on account, $1,150. Paid dividends, $1,800.
f. Paid automobile expenses (including rental charge) for month, $1,500, and miscellaneous expenses, $400.
g. Paid office salaries, $2,800.
Determined that the cost of supplies used was $1,050.

Answer 1

a. Dr Cash 17,500

Cr Common Stock 17,500

b. Dr Supplies 2,300

Cr Account payable 2,300

c. Dr Cash 13,300

Cr Sales commission 13,300

d. Dr Rent expense 3,000

Cr Cash 3,000

e. Dr Account payable 1,150

Cr Cash 1,150

f. Dr Dividend 1,800

Cr Cash 1, 800

g. Dr Automobile expense 1,500

Dr Miscellaneous expense 400

Cr Cash 1,900

h. Dr Salaries expense 2,800

Cr Cash 2,800

i. Dr Supplies expense 1,050

Cr Supplies 1,050

Step-by-step explanation:

Preparation of Journal entry

a. Dr Cash 17,500

Cr Common Stock 17,500

b. Dr Supplies 2,300

Cr Account payable 2,300

c. Dr Cash 13,300

Cr Sales commission 13,300

d. Dr Rent expense 3,000

Cr Cash 3,000

e. Dr Account payable 1,150

Cr Cash 1,150

f. Dr Dividend 1,800

Cr Cash 1, 800

g. Dr Automobile expense 1,500

Dr Miscellaneous expense 400

Cr Cash 1,900

(1,500+400)

h. Dr Salaries expense 2,800

Cr Cash 2,800

i. Dr Supplies expense 1,050

Cr Supplies 1,050