Chapter 3, Problem 3.1AP

Recording Nonquantitative Journal Entries (P3-1)

The following is a series of accounts for Kruger & Laurenzo, Incorporated, which has been operating for two years. The accounts are listed and numbered for identification. Following the accounts is a series of transactions. For each transaction, indicate the account(s) that should be debited and credited by entering the appropriate account numbers) to the right of each transaction. If no journal entry is needed, write none after the transaction. The first transaction is given as an example.

Account No.	Account Title	Account No.	Account Title
1	Cash	9	Wages Payable
2	Accounts Receivable	10	Income Taxes Payable
3	Supplies	11	Common Stock
4	Prepaid Expenses	12	Additional Paid-in Capital
5	Buildings	13	Retained Earnings
6	Land	14	Service Revenue
7	Accounts Payable	15	Other Expenses (wages, supplies, interest)
8	Mortgage Payable	16	Income Tax Expense

Transactions		Debit	Credit
a.	Example: Issued stock to new investors.	1	11, 12
b.	Incurred and recorded operating expenses on credit to be paid next period.	________	________
c.	Purchased on credit but did not use supplies this period.	________	________
d.	Performed services for customers this period on credit.	________	________
e.	Prepaid a tire insurance policy this period to cover the next 12 months.	________	________
f	Purchased a building this period by making a 20 percent cash down payment and signing a mortgage loan for the balance.	________	________
g•	Collected cash this year for services rendered and recorded in the prior year.	________	________
h.	Collected cash for services rendered this period.	________	________
i.	Paid cash this period for wages earned and recorded last period.	________	________
j	Paid cash for operating expenses charged on accounts payable in the prior period.	________	________
k.	Paid cash for operating expenses incurred in the current period.	________	________
l.	Made a payment on the mortgage loan, which was part principal repayment and part interest.	________	________
m.	This period a shareholder sold some shares of her stock to another person for an amount above the original issuance price.	________	________
n.	Used supplies on hand to clean the offices.	________	________
o.	Recorded income taxes for this period to be paid at the beginning of the next period.	________	________
p	Declared and paid a cash dividend this period.	________	________