can you give me the correct answer? Prepare journal entries for the following tr
ID: 2417052 • Letter: C
Question
can you give me the correct answer?
Prepare journal entries for the following transactions,. You do not need to include explanation for your entries. All entries are independent of each other unless stated. Issued shares of common stock to investors in exchange for $100,000 in cash. Incurrred electric expense on account for the month of %400. Paid cash of %400 on account for the electric expense incurred above. Performed services for customer Mr. Konk and billed him $6,000, terms 2/10, n/30. 5 days later, Konk paid off his bill above. Bought a new truck for $45,000. Paid $5,000 cash down payment and signed note for the balance. The interest rate on the note is 6%. Recorded interest for one month on the truck note above. Payment isn't due until next year. Received $6,000 cash in advance from customer on a contract which provides for us to perform a service for the, at the end of each month for the next 12 months. Performed services on the contract above for one month for our customer. Monthly financial statements are prepared. What adjusting entry us needed?Explanation / Answer
JOURNAL ENTRIES:
(a) Cash Dr $100,000
To Common Stock Cr $100,000
(b) Electricity expenses Dr $400
To Electricity expenses Payable Cr $400
(C) Electricity expenses Payable Dr $400
To Cash Cr $400
(d) Accounts Receivable Dr $6,000
To Service Income Cr $6,000
(e) Cash Dr $5,880
Discont Allowed Dr $120( 2% on $6,000 since payemnt made within 10 days)
To Accounts Receivable Cr $6,000
(f) Vehicle Dr $45,000
To Cash Cr $5,000
To Account Payable Cr $40,000
(g) Interest Dr $200
To Provision for Interest Cr $200 ( Interest 6% Per annum on $ 40,000)
(h) Cash Dr $6,000
To Advance from Customer Cr $6,000
(i) Advance From Customer Dr $500
To Service Income Cr $500( $6,000/12=$500 per month)
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