Comprehensive Accounting Cycle Review 11-2 (Part Level Submission) (a) Journaliz

Question

Comprehensive Accounting Cycle Review 11-2 (Part Level Submission)

(a)

Journalize the February transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Comprehensive Accounting Cycle Review 11-2 (Part Level Submission)

Karen Noonan opened Windsor, Inc. on February 1, 2017. During February, the following transactions were completed.
Feb. 1 Issued 4,600 shares of Clean Sweep common stock for $9,620. Each share has a $1.50 par. 1 Borrowed $9,000 on a 2-year, 6% note payable. 1 Paid $6,670 to purchase used floor and window cleaning equipment from a company going out of business ($3,580 was for the floor equipment and $3,090 for the window equipment). 1 Paid $160 for February Internet and phone services. 3 Purchased cleaning supplies for $730 on account. 4 Hired 4 employees. Each will be paid $360 per 5-day work week (Monday– Friday). Employees will begin working Monday, February 9. 5 Obtained insurance coverage for $8,640 per year. Coverage runs from February 1, 2017, through January 31, 2018. Karen paid $2,160 cash for the first quarter of coverage. 5 Discussions with the insurance agent indicated that providing outside window cleaning services would cost too much to insure. Karen sold the window cleaning equipment for $2,920 cash. 16 Billed customers $2,890 for cleaning services performed through February 13, 2017. 17 Received $432 from a customer for 4 weeks of cleaning services to begin February 21, 2017. 18 Paid $220 on amount owed on cleaning supplies. 20 Paid $3 per share to buy 300 shares of Clean Sweep common stock from a shareholder who disagreed with management goals. The shares will be held as treasury shares. 23 Billed customers $3,180 for cleaning services performed through February 20. 24 Paid cash for employees’ wages for 2 weeks (February 9–13 and 16–20). 25 Collected $1,850 cash from customers billed on February 16. 27 Paid $160 for Internet and phone services for March. 28 Declared and paid a cash dividend of $0.30 per share.

Explanation / Answer

Date Account Titles and Explanation Debit Credit Feb. 1 Cash 9620 Common stock (4600 x $1.50) 6900 Additional paid-in capital 2720 (To record issue of common stock) Feb. 1 Cash 9000 Note payable 9000 (To record amount borrowed) Feb. 1 Floor cleaning equipment 3580 Window cleaning equipment 3090 Cash 6670 (To record equipment purchased) Feb. 1 Utilities expense 160 Cash 160 (To record cash paid for utilities) Feb. 3 Cleaning supplies 730 Accounts payable 730 (To record cleaning supplies purchased on account) Feb. 4 No entry 0 No entry 0 Feb. 5 Prepaid insurance 2160 Cash 2160 (To record insurance purchased for first quarter) Feb. 5 Cash 2920 Loss on disposal of assets 170 Window cleaning equipment 3090 (To record sale of equipment) Feb. 16 Accounts receivable 2890 Service revenue 2890 (To record service revenue billed) Feb. 17 Cash 432 Unearned service revenue 432 (To record advance received from customer) Feb. 18 Accounts payable 220 Cash 220 (To record payment on account) Feb. 20 Treasury stock (300 x $3) 900 Cash 900 (To record purchase of treasury stock) Feb. 23 Accounts receivable 3180 Service revenue 3180 (To record service revenue billed) Feb. 24 Salaries and wages expense 2880 Cash 2880 (To record payment of wages) Feb. 25 Cash 1850 Accounts receivable 1850 (To record collections on account) Feb. 27 Utilities expense 160 Cash 160 (To record cash paid for utilities) Feb. 28 Dividends [$0.30 x (4600 - 300)] 1290 Cash 1290 (To record dividend declared and paid)

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