Prepare general journal entries for the following transactions of a business called Pose for Pics in 2016:
Aug. 1: Hashim Khan, the owner, invested Rs. 57,500 cash and Rs. 32,500 of photography equipment in the business.
04: Paid Rs. 3,000 cash for an insurance policy covering the next 24 months.
07: Services are performed and clients are billed for Rs. 10,000.
13: Purchased office supplies for Rs. 1,400. Cash paid Rs. 400 and remaining outstanding.
20: Received Rs. 2,000 cash in photography fees earned previously.
24: The client immediately pays Rs. 15,000 for services to be performed at a later date.
29: The business acquires photography equipment. The purchase price is Rs. 100,000, pays Rs. 25,000 cash and signs a note for the balance.
Answers
JOURNAL ENTRIES
GIVEN: Transactions of a business called Pose for Pics in 2016.
TO FIND: Journal Entries
SOLUTION: As we know,
The following transactions will be recorded in the books of journal as follows:
Cash A/c ----dr 57,500
Equipment A/c ----dr 32,500
To Capital A/c 90,000
( being business started by investing cash and buying equipment.)
Insurance A/c -----dr 3,000
To Cash A/c 3,000
(being insurance amount paid through cash.)
Debtors A/c ----dr 10,000
To Sales A/c 10,000
(being Service rendered.)
Office supplies A/c ----dr 1,400
To Cash A/c 400
To Creditors A/c 1000
(being office supplies and partially paid through cash.)
Cash A/c -----dr 2,000
To Debtors A/c 2,000
(being cash received from the debtor to whom service was rendered before.)
Cash A/c -----dr 15,000
To Sales A/c 15,000
(being Cash payment received for the service rendered.)
Equipment A/c -----dr 25,000
To Cash A/c 10,000
To Bills Payable A/c 15,000
(being equipment purchased and payment made partially through cash and for rest signed a note.)
Journal Entries were passed based on the nature of account.
#SPJ1
Explanation:
journal entries and ledger posting