Basic Accounting Equations: Recognition Of Normal Balances
The following transactions pertain to the Jennifer Royall Company: May 1 Jenni¬fer Royall invested cash of $25,000 and land valued at $15,000 into the business.
Cash…. $25.000 and Land $15,000= Owner’s equality $ 40,000
5 Provided $1,000 of services to Jason Ratchford, a client, on account. Account receivable $1,000 Revenue $1,000
9 Paid $1,250 of salaries to an employee. Salary Expensive $1,250 Cash $1,250
14 Acquired a new computer for $4,200, on account. Computer $4,200 Accounts payable $4,200 Purchased computer on account
20 Collected $800 from Jason Ratchford for services provided on May 5. Cash $800 Account receivable $800 Received $1,000 by Jason Ratchford
24 Borrowed $2,500 from BestBanc by securing a six-month loan. Cash $2,500 Notes payable $2,500 Borrowed $2,500 from BestBanc,6 months
Prepare journal entries (and explanations) to record the preceding transactions and events.
3. Balance sheet preparation.
The following data relate to Preston Company as of December 31, 20XX:
Building $40,000 Accounts receivable $24,000
Cash 21,000 Loan payable 30,000
J. Preston, Capital 65,000 Land …show more content…
Journal entry preparation. On January 1 of the current year, Peter Houston invested $80,000 cash into his company MuniServ. The cash was obtained from an owner investment by Peter Houston of $50,000 and a $30,000 bank loan. Shortly thereafter, the company ac¬quired selected assets of a bankrupt competitor. The acquisition included land ($10,000), a building ($40,000), and vehicles ($10,000). MuniServ paid $45,000 at the time of the transaction and agreed to remit the remaining balance due of $15,000 (an account payable) by February