Put $2,000 of own money into business. Received a $5,000 loan at 12% interest fr
ID: 2416036 • Letter: P
Question
Put $2,000 of own money into business. Received a $5,000 loan at 12% interest from SMB Bank. The interest is payable on the first of each month with principal due on July 1. 2016. Purchased office supplies on account from Superhero's Warehouse for $175. Terms are net 20. Purchased furniture for cash for $575 from Office Depot. Purchased computer from Creative Computer for $1,500 on account. Paid $300 cash for three months' insurance to State Farm Insurance. Purchased advertising space in The Avengers Monthly Magazine for July and August. Total cost is $250 in cash. Sold consulting to The Hulk for $175 check. Sold consulting to Iron Man on account for $880. Terms are net 10. Sold consulting to Hawkeye for $225. Terms are net 10. Sold consulting to Thor for $1220. Terms are net 10. Paid Superhero's Warehouse for required amount. Sold consulting to The Hulk for $ 1200. Terms are net 10. Received check from Iron Man for $840. Received check from Thor for $ 1,220. Sold consulting to Hawkeye for $150. Terms are net 10. Counted office supplies and found $75 in supplies left. depreciation on Office equipment/furniture is $60.Explanation / Answer
Date Account title Debit credit 1 cash 2000 capital 2000 [Cash introduce in to business] 1 Cash 5000 Bank loan 5000 [loan taken from bank ] 2 office supplies 175 Accounts payable 175 [purchased supplies on account] 3 Furniture 575 cash 575 [Furniture purchased] 4 computer 1500 Accounts payable 1500 [Purchased computer on account ] 6 Prepaid insurance 300 Cash 300 [insurance paid in advance for 3 month] 9 Prepaid advertising 250 cash 250 [advertising paid in advance] 12 cash 175 service revenue 175 [provide consulting services ] 14 Accounts receivable 880 service revenue 880 [provided services on account] 17 Accounts receivable 225 Service revenue 225 [services provided on account] 17 accounts receivable 1220 service revenue 1220 [services provided on account] 18 Accounts payable 175 cash 175 [being supplies purchased on account paid] 21 Accounts receivable 1200 service revenue 1200 23 cash 840 Accounts receivable 840 [being receivables collected] 25 cash 1220 accounts receivable 1220 [being receivables collected] 27 accounts receivable 150 service revenue 150 [services on account] 31 supplies expense 100 office supplies 100 Supplies used ] 175-75 31 Depreciation 60 Accumulated depreciation 60 [depreciation charged]
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