BE 163

Journalize the following business transactions in general journal form. Identify each
transaction by number. You may omit explanations of the transaction.
1. Barry Cain invested $38,000 cash to start an appliance repair business.
2. Hired an employee to be paid $500 per week, starting tomorrow.
3. Paid two years’ rent in advance, $10,800.
4. Paid the worker’s weekly wage.
5. Recorded revenue earned and received for the week, $2,900.

Solution 163
1. Cash……. 38,000
Owner’s Capital...................................................................... 38,000

2. No entry, not a transaction.

3. Prepaid Rent 10,800

Cash....................................................................................... 10,800
4. Salaries and Wages Expense 500
Cash....................................................................................... 500

5. Cash………. 2,900
Service Revenue.................................................................... 2,900

LO2 BT: AP Difficulty: Medium TOT: 5 min. AACSB: RT AICPA BB: CT AICPA FN: Reporting
BE 165
Journalize the following transactions for Tanaka Company for June 2016, the
company’s first month of operations. You may omit explanations for the transactions.
1. Purchased equipment on account for $9,800.
2. Billed customers $5,600 for services performed.
3. Made payment of $2,400 on account for equipment purchased earlier in month.
4. Collected $3,900 from customer accounts.

Solution 165
1. Equipment 9,800
Accounts Payable................................................................... 9,800

2. Accounts Receivable 5,600

Service Revenue.................................................................... 5,600

3. Accounts Payable 2,400

Cash....................................................................................... 2,400

4. Cash 3,900
Accounts Receivable.............................................................. 3,900
L BE 167
The transactions of the Litehouse Realty are recorded in the general journal below.
You are to post the journal entries to T-accounts.

General Journal
_____________________________________________________________________________
Date Account Titles Debit
Credit
_____________________________________________________________________________
2016
Aug. 5 Accounts Receivable 4,600
Service revenue 4,600

10 Cash 3,200
Service Revenue 3,200

19 Rent Expense 1,300

Cash 1,300

25 Cash 1,500
Accounts Receivable 1,500

Solution 167
General Ledger

Cash Accounts Receivable

8/10 3,200 8/19 1,300 8/5 4,600 8/25 1,500
8/25 1,500

8/31 Bal. 3,400 8/31 Bal. 3,100

Service Revenue Rent Expense

8/5 4,600 8/19 1,300
8/10 3,200
8/31 Bal. 7,800 8/31 Bal. 1,300

LO3 BT: AP Difficulty: Medium TOT: 5 min. AACSB: RT AICPA BB: CT AICPA FN: Reporting
Ex. 179
Journalize the following business transactions in general journal form. Identify each
transaction by number. You may omit explanations of the transactions.
1. The owner, Mai Li, invests $40,000 in cash in starting a real estate office
operating as a sole proprietorship.
2. Purchased $500 of supplies on credit.
3. Purchased equipment for $9,000, paying $4,000 in cash and signed a 30-day,
$5,000, note payable.
4. Real estate commissions billed to clients amount to $4,000.
 5. Paid $800 in cash for the current month’s rent.
6. Paid $200 cash on account for supplies purchased in transaction 2.
7. Received a bill for $600 for advertising for the current month.
8. Paid $2,500 cash for office salaries and wages.
9. Li withdrew $1,800 from the business for living expenses.
10. Received a check for $2,500 from a client in payment on account for
commissions billed in transaction 4.

Solution 179
1. Cash 40,000
Owner’sCapital.......................................................................... 40,000

2. Supplies 500
Accounts Payable............................................................. 500

3. Equipment 9,000
Cash................................................................................. 4,000
NotesPayable................................................................... 5,000

4. Accounts Receivable 4,000

Service Revenue.............................................................. 4,000

5. Rent Expense 800

Cash................................................................................. 800

6. Accounts Payable 200

Cash................................................................................. 200

7. Advertising Expense 600

Accounts Payable............................................................. 600

8. Salaries and Wages Expense 2,500

Cash .......................................................................... 2,500

9. Owner’s Drawings 1,800

Cash................................................................................. 1,800

10. Cash 2,500

Accounts Receivable ....................................................... 2,500

LO2 BT: AP Difficulty: Medium TOT: 15 min. AACSB: RT AICPA BB: CT AICPA FN: Reporting
Ex. 190
L. Phair and Associates is a financial planning service. The account balances at
December 31, 2016 are shown by the following alphabetical list:
Accounts Payable $ 5,000
Accounts Receivable 19,000
Buildings 140,000
Cash 11,700
Equipment 31,300
Land 42,000
Owner’s Capital 152,900
Notes Payable 95,000
Notes Receivable 8,100
 Supplies 800

Instructions
Prepare a trial balance with the accounts arranged in financial statement order.

Solution 190
L. PHAIR AND ASSOCIATES
Trial Balance
December 31, 2016
Debit
Credit
Cash................................................................................................ $ 11,700
Accounts Receivable....................................................................... 19,000
Notes Receivable............................................................................ 8,100
Supplies.......................................................................................... 800
Equipment....................................................................................... 31,300
Buildings.......................................................................................... 140,000
Land................................................................................................ 42,000
Notes Payable................................................................................. $
95,000
Accounts Payable............................................................................ 5,000
Owner’s Capital...............................................................................
152,900
Totals...................................................................................... $252,900
$252,900

LO4 BT: AP Difficulty: Medium TOT: 10 min. AACSB: RT AICPA BB: CT AICPA FN: Reporting