Question

Following are the transactions of Sustain Company. June 1 T. James, owner, invested $17,500 cash in Sustain Company. 2 The company purchased $10,500 of furniture made from reclaimed wood on credit. 3 The company paid $1,900 cash for a 12-month insurance policy on the reclaimed furniture. 4 The company billed a customer $9,500 in fees earned from preparing a sustainability report. 12 The company paid $10,500 cash toward the payable from the June 2 furniture purchase. 20 The company collected $9,500 cash for fees billed on June 4. 21 T.James, owner, invested an additional $16,500 cash in Sustain Company. 30 The company received $11,500 cash from a client for sustainability services for the next 3 months. Prepare general journal entries for the above transactions.

Answer 1

Answer:

Sustain Company

General Journal Entries;

June 1: Debit Cash $17,500

Credit Common stock $17,500

To record the investment by T. James.

June 2: Debit Furniture $10,500

Credit Accounts payable $10,500

To record the purchase of furniture on account.

June 3: Debit Prepaid Insurance $1,900

Credit Cash $1,900

To record the prepayment of insurance for 3 months.

June 4: Debit Accounts receivable $9,500

Credit Service revenue $9,500

To record the rendering of service on account.

June 12: Debit Accounts payable $10,500

Credit Cash $10,500

To record the payment on account.

June 20 Debit Cash $9,500

Credit Accounts receivable $9,500

To record the receipt of cash on account.

June 21 Debit Cash $16,500

Credit Common stock $16,500

To record additional investment by T. James.

June 30 Debit Cash $11,500

Credit Unearned revenue $11,500

To record the receipt of cash for future services.

Explanation:

a) Data and Analysis:

June 1: Cash $17,500 Common stock $17,500

June 2: Furniture $10,500 Accounts payable $10,500

June 3: Prepaid Insurance $1,900 Cash $1,900

June 4: Accounts receivable $9,500 Service revenue $9,500

June 12: Accounts payable $10,500 Cash $10,500

June 20 Cash $9,500 Accounts receivable $9,500

June 21 Cash $16,500 Common stock $16,500

June 30 Cash $11,500 Unearned revenue $11,500