Using the T accounts below, record the following transactions. Label each entry

Question

Using the T accounts below, record the following transactions. Label each entry with the appropriate letter.

a. The stockholders contributed cash of $40,000 and a truck worth $48,000 into the business in exchange for 8,800 shares of $10 par value stock.

b. Paid two months' rent in advance, $2,400.

c. Agreed to do a hauling job for a price of $6,400.

d. Performed the hauling job. Will get paid later.

e. Received payment of $2,000 on the hauling job.

f. Purchased gasoline on credit, $40.

There are t-accounts for the following:

-Cash (three entries)

-Accounts Payable (one entry)

-Accounts Receivable (two entries)

-Common Stock (one entry)

-Prepaid rent (one entry)

-Hauling revenue (one entry)

-Truck (one entry)

-Gasoline expense (one entry)

Explanation / Answer

Solution:

Cash Account S. No Particulars Debit S. No Particulars Credit a To common stock $40,000.00 b By Prepaid Rent $2,400.00 e To Accounts receivables $2,000.00

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