Chapter 2: Q37PGB_3 (page 109)

Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance
Theodore McMahon opened a law office on April 1, 2018. During the first month of operations, the business completed the following transactions:
Apr. 1 McMahon contributed $70,000 cash to the business, Theodore McMahon, Attorney. The business issued common stock to McMahon.
3 Purchased office supplies, $1,100, and furniture, $1,300, on account.
4 Performed legal services for a client and received $2,000 cash.
7 Purchased a building with a market value of $150,000, and land with a market value of $30,000. The business paid $40,000 cash and signed a note payable to the bank for the remaining amount.
11 Prepared legal documents for a client on account, $400.
15 Paid assistant’s semi monthly salary, $1,200.
16 Paid for the office supplies purchased on April 3 on account. 18 Received $2,700 cash for helping a client sell real estate.
19 Defended a client in court and billed the client for $1,700.
25 Received a bill for utilities, $650. The bill will be paid next month.
28 Received cash on account, $1,100.
29 Paid $3,600 cash for a 12-month insurance policy starting on May 1.
29 Paid assistant’s semi monthly salary, $1,200.
30 Paid monthly rent expense, $2,100.
30 Paid cash dividends of $3,200.
Requirements 3. Post the journal entries to four-column accounts in the ledger, using dates, account numbers, journal references, and posting references. Assume the journal entries were recorded on page 1 of the journal.

Expert verified

Accounts Receivables are the amount to the business by clients or customers and the required journal entries are passed in Step 2.

Step by step solution

The accounts receivables are defined as the amount of money owed to the business to exchange goods or services to the clients and the customers.

Accounts Receivables Account Number – 111
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
Jan 11	Service Revenue		400		400
19	Service Revenue		1,700		2,100
28	Cash			1,100	1,000

Office Supplies Account Number – 121
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
Jan 3	Accounts Payable		1,100		1,100

Prepaid Insurance Account Number – 131
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
Jan 29	Cash		3,600		3,600

Accounts Payable Account Number – 201
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
Jan 3	Office Supplies			1,100
	Furniture			1,300		2,400
Jan 16	Cash			1,100		3,500

Utilities Payable Account Number – 211
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
Jan 25	Utilities Expense			650		650

Notes Payable Account Number – 221
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
Jan 7	Building			140,000		140,000

Service Revenue Account Number – 411
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
Jan
4	Cash			2,000		2,000
Jan 11	Accounts Receivables			400		2,400
18	Cash			2,700		5,100
19	Accounts Receivables			1,700		6,800

Salaries Expense Account Number - 511
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
Jan 15	Cash		1,200		1,200
Jan 29	Cash		1,200		2,400

Utilities Expense Account Number - 531
					Balance
Date	Item	PR	Debit	Credit	Debit	Credit
Jan 25	Utilities Payable		650		650

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