Question

Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transaction. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

1.Stockholders invest $40,000 in cash in starting a real estate office operating as a corporation.
2.Purchased $500 of supplies on credit.
3.Purchased equipment for $25,000, paying $3,500 in cash and signed a 30-day, $21,500, note payable.
4.Real estate commissions billed to clients amount to $4,000.
5.Paid $700 in cash for the current month's rent.
6.Paid $250 cash on account for office supplies purchased in transaction 2.
7.Received a bill for $800 for advertising for the current month.
8.Paid $2,500 cash for office salaries.
9.Paid $1,200 cash dividends to stockholders.
10.Received a check for $2,000 from a client in payment on account for commissions billed in transaction 4.

Answer 1

Date Account titles and explanation Debit Credit

1. Cash $40,000

Common stock $40,000

(To record cash invested)

2. Supplies $500

Accounts payable $500

(To record supplies purchased on credit)

3. Equipment $25,000

Cash $3,500

Notes payable $21,500

(To record equipment purchased)

4. Accounts receivable $4,000

Service revenue $4,000

(To record real estate commissions billed to clients)

5. Rent expense $700

Cash $700

(To record rent expense)

6. Accounts payable $250

Cash $250

(To record cash paid for office supplies purchased)

7. Advertising expense $800

Cash $800

(To record advertising expense paid)

8. Salaries expense $2,500

Cash $2,500

(To record office salaries paid)

9. Cash dividends $1,200

Cash $1,200

(To record cash dividends paid)

10. Cash $2,000

Accounts receivable $2,000

(To record check received from a client)