the following transactions were completed during july, the second month of the b
ID: 2350267 • Letter: T
Question
the following transactions were completed during july, the second month of the business's operations.July 1. pat sharpe made an additional investment in ps music by depositing $4,000 in ps music's checking account.
1. instead of continuing to share office space with a local real estate agency, Pat decided to rent office space near a local music store. Paid rent for july, $1,800.
1. paid premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period.
2. received $1,250 on account.
Explanation / Answer
Journal entries: July 1. pat sharpe made an additional investment in ps music by depositing $4,000 in ps music's checking account. Debit: Cash 4,000 Credit: Sharpe, Capital 4,000 1. instead of continuing to share office space with a local real estate agency, Pat decided to rent office space near a local music store. Paid rent for july, $1,800. Debit: Rent expense 1,800 Credit: Cash 1,800 1. paid premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. Debit: Prepaid Insurance 2,700 Credit: Cash 2,700 2. received $1,250 on account. Debit: Cash 1,250 Credit: Accounts Receivable 1,250
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