Exercise 2-7 Preparing general journal entries LO P1 Following are the transacti

Question

Exercise 2-7 Preparing general journal entries LO P1 Following are the transactions of a new company called Pose-for-Pics. Aug. 1 Madison Harris, the owner, invested $14,750 cash and $63,425 of photography equipment in the company in exchange for common stock. 2 The company paid $3,900 cash for an insurance policy covering the next 24 months. 5 The company purchased office supplies for $2,803 sh. 20 The company received $3,250 cash in photography fees earne 31 The company paid $874 cash for August utilities. Prepare general journal entries for the above transactions. View transaction list Journal entry worksheet 2 3 4 Madison Harris, the owner, invested $14,750 cash and $63,425 of photography equipment in the company in exchange for common stock Note: Enter debits before credits General Jotrnal Date Debit Aug 01

Explanation / Answer

Solution:

Journal Entries - Pose for Pics Date Particulars Debit Credit 1-Aug Cash Dr $14,750.00 Equipment Dr $63,425.00       To Common stock $78,175.00 (To record investment of cash and equipment in business) 2-Aug Prepaid insurance Dr $3,900.00       To Cash $3,900.00 (To record payment of insurance premium for 24 months) 5-Aug Office supplies $2,803.00       To Cash $2,803.00 (To record purchase of office supplies) 20-Aug Cash Dr $3,250.00       To Fees Earned $3,250.00 (To record fees earned on photography) 31-Aug Utilities expense Dr $874.00       To Cash $874.00 (To record payment of utilities expense)

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