Chapter 8, Problem 64E

Accounts Payable

Sleek Ride, a company providing limo services, has a December 31 year-end date. For Sleek Ride, the following transactions occurred during the first 10 days of June:

a. Purchased, on credit, space for classified advertisements in the New York Times for $1,950. The advertising was run the day the space was purchased.

b. Purchased office supplies from Office Max on credit in the amount of $475.

c. One of Sleek Ride’s sales staff signed a $20,000 contract to provide exclusive limo services for a large company for the remainder of the month. The salesperson’s commission is 10% of service revenue. The commission will be paid July 10. ( Note: Concern yourself only with the commission.)

d. Received electric bill for May. The bill is $4,200 and is due June 15.

e. Received a bill for $970 from Harry’s Auto. Harry’s repaired 10 limos for Sleek Ride in late May.

Payment is due June 18.

Required:

Prepare journal entries for the above transactions.