Lee Choi opened Choi\'s Window Washing on July 1. 2008. During July the followin

Question

Lee Choi opened Choi's Window Washing on July 1. 2008. During July the following transaction were completed. Choi invested $12,000 cash in the business. Purchased used truck for $6,000. paying $3,000 cash and the balance on account. Purchased cleaning supplies for $1.300 on account. Paid $2,400 cash on one-year insurance policy effective July 1. Billed customers $2,500 for cleaning services. Paid $1,000 cash on amount owed on truck and $800 on amount owed on cleaning supplies. Paid $1.200 cash for employee salaries. Collected $1,400 cash from customers billed on July 12. Billed customers $5,000 for cleaning services. Paid gas and oil for month on truck $200. Withdrew $900 cash for personal use.

Explanation / Answer

(a) Date Account titles Debit Credit 1-Jul Cash 12000 To Lee Choi's Capital 12000 Equipment 6000 To Cash 3000 To Accounts Payable 3000 3-Jul Cleaning Supplies 1300 To Accounts Payable 1300 5-Jul Prepaid Insurance 2400 To Cash 2400 12-Jul Accounts Receivable 2500 To Service Revenue 2500 18-Jul Accounts Payable 1800 To Cash 1800 20-Jul Salaries 1200 To Cash 1200 21-Jul Cash 1400 To accounts Receivable 1400 25-Jul Accounts Receivable 5000 To Service Revenue 5000 31-Jul Repairs 200 To Cash 200 Drawings 900 To Cash 900 (c) Accounts Receivable 1500 To Service Revenue 1500 Depreciation 300 To Accumulated Depreciation 300 Insurance expense 200 ToPrepaid Insurance 200 Supplies expenses 900 To Supplies 900 Salaries Expenses 600 To Salary Payable 600

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