Question

Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transactions.

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

General Ledger

1.

Cash $40,000 (debit)

Capital $40,000 (credit)

Owners Invest In the business

2.

Supplies $500 (debit)

Accounts Payable $500 (credit)

Supplies purchased on credit

3

Equipment $25,000 (debit)

Cash $3,500 (credit)

Note Payable $21,500 (credit)

Equipment purchased partly in cash and in credit

4.

Accounts Receivable $4,000 (debit)

Commission Earned $4,000 (credit)

Commission earned not yet received

5.

Rent Expense $700 (debit)

Cash $700 (credit)

Rent paid in cash

6.

Accounts Payable $250 (debit)

Cash $250 (credit)

Settlement of Accounts Payable

7.

Advertising Expense $800 (debit)

Accounts payable $800 (credit)

Advertising Bill due

8.

Salaries Expenses $2,500 (debit)

Cash $2,500 (credit)

Salaries paid

9.

Dividends $1,200 (debit)

Cash $1,200 (credit)

Dividends paid to owners of the company

10.

Cash $2,000 (debit)

Accounts Receivable $2,000 (credit)

Accounts Receivables settle their debts

Step-by-step explanation:

See the journal entries prepared including narrations (for your learning and understanding)