Chapter 2, Problem 69.1C

To determine

Journal Entries:

Journal entries are medium of recording business transactions. A business enterprise must record all the business transaction to evaluate net income or loss and analyze the financial performance of a company during a specified accounting period.

Journalize transactions which occurred during the month of January.

Answer to Problem 69.1C

Date	Accounts and Explanation	Debit	Credit
Jan.
1	Cash	$16,000
	Common Stock		$16,000
1	Cash	25,000
	Notes Payable		25,000
1	Legal Expense	1,200
	Cash		1,200
1	Equipment	7,000
	Cash		7,000
1	Rent Expense	800
	Cash		800
3	Prepaid Insurance	3,600
	Cash		3,600
3	Supplies	2,500
	Accounts Payable		2,500
5	No Journal entry required
8	Prepaid Rent	10,000
	Cash		10,000
12	Advertising Expense	4,500
	Cash		4,500
18	Accounts Payable	1,000
	Cash		1,000
25	Cash	400
	Accounts Receivable	600
	Sales Revenue		1,000
25	Artist Fee Expense	800
	Cash		800
28	Cash	3,800
	Unearned Sales Revenue		3,800
30	Cash	200
	Accounts Receivable		200
30	Salaries Expense	2,400
	Cash		2,400

Explanation of Solution

Date	Assets	Liabilities	Equity
Jan.
1	Cash (Increase)		Common Stock (Increase)
1	Cash (Increase)	Notes Payable (Increase)
1	Cash (Decrease)		Legal Expense (Decrease)
1	Equipment (Increase)
	Cash (Decrease)
1	Cash (Decrease)		Rent Expense (Decrease)
3	Prepaid Insurance (Increase)
	Cash (Decrease)
3	Supplies (Increase)	Accounts Payable (Increase)
8	Prepaid Rent (Increase)
	Cash (Decrease)
12	Cash (Decrease)		Advertising Expense (Decrease)
18	Cash (Decrease)	Accounts Payable (Decrease)
25	Cash (Increase)		Sales Revenue (Increase)
	Accounts Receivable (Increase)
25	Cash (Decrease)		Artist Fee Expense (Decrease)
28	Cash (Increase)	Unearned Sales Revenue (Increase)
30	Cash (Increase)
	Accounts Receivable (Decrease)
30	Cash (Decrease)		Salaries Expense (Decrease)