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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Exercise 2-49 Journalizing Transactions

Kauai Adventures rams and sells surfboards, snorkeling, and scuba equipment. During March, Kauai engaged in the following transactions:

March 2 Received $51,500 cash from customers for rental,

3 Purchased on credit ten new surfboards (which Kauai classifies as inventory) for $180 each.

6 Paid wages to employees in the amount of $9,200.

9 Paid office rem for the month in L1]: amount of$l,000.

12 Purchased a new Ford truck for 340.800: paid 51,000 down in cash and secured a loan from Princeville Bank for the $39,800 balance.

March 13 Collected a $1,050 account receivable.

16 Paid an account payable in the amount of $950.

23 Borrowed $10,000 on a 6-month, 8% note payable.

27 Paid the monthly telephone hill of $185.

30 Paid a monthly advertising bill of $1,550.

Required:

Prepare a journal entry for each of these transactions.

To determine

Journal Entries:

The medium through which all the business transaction are recorded in the books of accounts are called journal entries.

Prepare journal entries for each of the transactions.

Explanation
    Date Accounts IncreaseDecrease
    March
    2Cash$51,500
    Rent Revenue51,500
    3Merchandise Inventory180
    Accounts Payable180
    6Wages Expense9,200
    Cash9,200
    9Rent Expense1,000
    Cash1,000
    12Truck40,800
    Cash

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