Santo Birch opens a Web consulting business called Show-Me-the-Money and complet

Question

Santo Birch opens a Web consulting business called Show-Me-the-Money and completes the following transactions in its first month of operations.

    

Birch invests $125,000 cash along with office equipment valued at $30,000 in the company in exchange for common stock.

The company prepaid $7,200 cash for twelve months' rent for office space. (Hint: Debit Prepaid Rent for $7,200.)

The company made credit purchases for $15,000 in office equipment and $3,000 in office supplies. Payment is due within 10 days.

The company paid $6,000 cash for the premium on a 12-month insurance policy. (Hint: Debit Prepaid Insurance for $6,000.)

The company received $8,000 cash as partial payment for the work completed on March 9.

     

Record these transactions using the following titles: Cash (101); Accounts Receivable (106); Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable (201); Common Stock (307); Dividends (319); Services Revenue (403); and Utilities Expense (690).

Santo Birch opens a Web consulting business called Show-Me-the-Money and completes the following transactions in its first month of operations.

Explanation / Answer

3/1 DR Cash (101) $125,000 DR Office Equipment (163) $30,000 CR Common Stock (307) $155,000
3/2 DR Prepaid Rent (131) $7,200 CR Cash (101) $7,200
3/3 DR Office Equipment (163) $15,000 DR Office Supplies (124) $3000 CR Accounts Payable (201) $18,000
3/6 DR Cash (101) $2000 CR Service Revenue (403) $2000
3/9 DR Accounts Receivable (106) $10,000 CR Service Revenue (403) $10,000
3/13 DR Accounts Payable (201) $18,000 CR Cash (101) $18,000
3/19 DR Prepaid Insurance (128) $6000 CR Cash (101) $6000
3/22 DR Cash (101) $8000 CR Accounts Receivable (106) $8000
3/25 DR Accounts Receivable (106) $2640 CR Service Revenue (403) $2640
3/29 DR Dividends (319) $6200 CR Cash (101) $6200
3/30 DR Office Supplies (124) $1000 CR Accounts Payable (201) $1000
3/31 DR Utilities Expense (690) $700 CR Cash (101) $700

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