Question

The following are the transactions of a new company called Pose-for-Pics.
Aug. 1 Madison Harris, the owner, invested $13,500 cash and $58,050 of photography equipment in the company in exchange for common stock.
Aug. 2 The company paid $3,100 cash for an insurance policy covering the next 24 months.
Aug. 5 The company purchased office supplies for $2,565 cash.
Aug. 20 The company received $3,600 cash in photography fees earned.
Aug. 31 The company paid $874 cash for August utilities.
Prepare general journal entries for the above transactions.

Answer 1

Answer:

Explanation:

The journal entries are shown below:

1. Cash A/c Dr $13,500

  Photography equipment A/c $58,050

               To Common stock A/c $71,550

2. Prepaid insurance A/c Dr $3,100

          To Cash A/c $3,100

(Being the prepaid insurance is paid for cash)

3. Office supplies A/c Dr $2,565

          To Cash A/c $2,565

(Being the office supplies are purchased for cash)

4. Cash A/c Dr $3,600

          To Photography fees earned A/c $3,600

(Being cash is received)

5. Utilities A/c Dr $874

          To Cash A/c $874

(Being the utilities are paid for cash)