[The following information applies to the questions displayed below.] The genera

Question

[The following information applies to the questions displayed below.]

The general ledger of Red Storm Cleaners at January 1, 2018, includes the following account balances:

   

   

The following is a summary of the transactions for the year:

March 12 Provide services to customers, $55,000, of which $20,500 is on account.

May 2 Collect on accounts receivable, $17,500.

June 30 Issue shares of common stock in exchange for $4,000 cash.

August 1 Pay salaries, $25,500 (of which $6,000 is for salaries payable in 2017).

September 25 Pay repairs and maintenance expenses, $12,500.

October 19 Purchase equipment for $7,500 cash.

December 30 Pay $1,200 cash dividends to stockholders.

  Accounts Debits Credits   Cash $ 17,500   Accounts Receivable 7,500   Supplies 3,500   Equipment 12,500      Accumulated Depreciation $ 4,000   Salaries Payable 6,000   Common Stock 22,500   Retained Earnings 8,500        Totals $ 41,000 $ 41,000 2. Record each of the summary transactions listed above. (If no entry is required for a particular transaction, select "No journal entry required first account field.) View transaction list Journal entry worksheet Record the service revenue for the year. Note: Enter debits before credits. Transaction General Journal Debit Credit a. ervice fee expense 20,500 55,000 Record entry Clear entry View general journal

Explanation / Answer

Journal entry :

No account and explanation debit credit Mar 12 Cash 34500 Account receivable 20500 Service revenue 55000 (To record revenue) May 2 Cash 17500 Account receivable 17500 (To record collect) June 30 Cash 4000 Common Stock 4000 (To record issue common stock) Aug 1 Salary payable 6000 Salary expense 19500 Cash 25500 (To record salary paid) Sep 25 Repairs and maintenance expense 12500 Cash 12500 (To record expense) Oct 19 Equipment 7500 Cash 7500 (To record purchase equipment) Dec 30 Dividend 1200 Cash 1200 (To record dividend paid) Dec 31 Salary expense 1200 Salary payable 1200 (To record accured salary) Dec 31 Depreciation expense-equipment 4500 Accumlated depreciation-Equipment 4500 (To record depreciation) Dec 31 Office supplies expense (3500-1100) 2400 Office supplies 2400 (To record supplies expense)

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