Denzel Brooks opens a web consulting business called Venture Consultants and com
ID: 2602042 • Letter: D
Question
Denzel Brooks opens a web consulting business called Venture Consultants and completes the following transactions in March:
March 1: Brooks invested $150,000 cash along with $22,000 of office equipment in the company.
March 2: Venture Consultants pre-paid $6,000 cash or six months’ rent for their office.
March 3: Venture Consultants made credit purchases for office equipment for $3,000 and office supplies for $1,200. Payment is due within 10 days.
March 6: Venture Consultants completed services for a client and immediately received $4,000 cash.
March 9: Venture Consultants completed a $7,500 project for a client who must pay within 30 days.
March 12: Venture Consultants paid $4,200 cash to settle the account payable created on March 3.
March 19: Venture Consultants paid a $5,000 cash premium on a 12-month insurance policy.
March 22: Venture Consultants received $3,500 cash as a partial payment for the work completed on March 9.
March 25: Venture Consultants completed work for another client for $3,820 on credit.
March 29: Brooks withdrew $5,100 cash from the company for personal use.
March 30: Venture Consultants purchased $600 of additional office supplies on credit.
March 31: Venture Consultants paid $500 cash for this month’s utility bill.
Instructions:
Prepare journals for the above economic transactions.
Under each journal entry, include one sentence that explains the transaction.
Explanation / Answer
Journal Entries (Amount in $)
Date Account Titles and explanation Debit Credit March 1 Cash 150,000 Office Equipment 22,000 Common Stock 172,000 (To record the investment of cash and office equipment) March 2 Prepaid rent 6,000 Cash 6,000 (To record the payment of prepaid rent) March 3 Office equipment 3,000 Office supplies 1,200 Accounts payable 4,200 (To record the credit purchase of office equipment and office supplies) March 6 Cash 4,000 Services revenue 4,000 (To record the cash received for completed services) March 9 Accounts Receivable 7,500 Services revenue 7,500 (To record the services revenue and payment receivable) March 12 Accounts payable 4,200 Cash 4,200 (To record the cash paid for accounts payable) March 19 Prepaid Insurance 5,000 Cash 5,000 (To record the premium paid for 12 month insurance policy) March 22 Cash 3,500 Accounts receivable 3,500 (To record the cash received for accounts receivable) March 25 Accounts receivable 3,820 Services revenue 3,820 (To record the service revenue and payment receivable) March 29 Drawings 5,100 Cash 5,100 (To record the cash withdrawal from company for personal use) March 30 Office supplies 600 Accounts Payable 600 (To record purchase of additional office supplies on credit) March 31 Utilities expense 500 Cash 500 (To record the cash paid for utility bill)Related Questions
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