Journalizing transactions, posting journal entries to T-accounts, and preparing a trial balance

Beth Stewart started her practice as a design consultant on November 1, 2018. During the first month of operations, the business completed the following transactions:

Nov. 1 Received \(41,000 cash and issued common stock to Stewart.

4 Purchased office supplies, \)1,200, and furniture, \(2,300, on account.

6 Performed services for a law firm and received \)2,100 cash.

7 Paid \(27,000 cash to acquire land to be used in operations.

10 Performed services for a hotel and received its promise to pay the \)800 within one week.

14 Paid for the furniture purchased on November 4 on account.

15 Paid assistant’s semimonthly salary, \(1,470.

17 Received cash on account, \)500.

20 Prepared a design for a school on account, \(680.

25 Received \)1,900 cash for design services to be performed in December.

28 Received \(3,100 cash for consulting with Plummer & Gordon.

29 Paid \)840 cash for a 12-month insurance policy starting on December 1.

30 Paid assistant’s semimonthly salary, \(1,470. 30 Paid monthly rent expense, \)650.

30 Received a bill for utilities, \(650. The bill will be paid next month.

30 Paid cash dividends of \)2,800.

Requirements 1. Record each transaction in the journal using the following account titles: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Land; Furniture; Accounts Payable; Utilities Payable; Unearned Revenue; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; and Utilities Expense. Explanations are not required.

Step by step solution

01

Step-by-Step SolutionStep 1: Definition of Salary Expense

The salary expense is defined as the cost incurred by the company for compensating the employees of the business.

02

Recording Journal Entries

	Journal entry
Date	Particulars	Debit ($)	Credit ($)
Nov
1	Cash	$41,000
	Common Stock		$41,000
4	Office Supplies	$1,200
	Furniture	$2,300
	Accounts Payable		$3,500
6	Cash	$2,100
	Service Revenue		$2,100
7	Land	$27,000
	Cash		$27,000
10	Accounts Receivables	$800
	Service Revenue		$800
14	Accounts Payable	$2,300
	Cash		$2,300
15	Salary Expense	$1,470
	Cash		$1,470
17	Cash	$500
	Accounts Receivables		$500
20	Accounts Receivables	$680
	Service Revenue		$680
25	Cash	$1,900
	Unearned Revenue		$1,900
28	Cash	$3,100
	Service Revenue		$3,100
29	Prepaid Insurance	$840
	Cash		$840
30	Salary Expense	$1,470
	Cash		$1,470
30	Rent expense	$650
	Cash		$650
30	Utilities Expense	$650
	Utilities Payable		$650
30	Dividends	$2,800
	Cash		$2,800

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