Question

Question:Use information from the T-accounts in Exercise 2-13 to prepare the general journal entries that were made for each of the seven transactions athrough g.

Cash Web Servers

(a) 6,000 (b) 4,800 (a) 12,000

(e) 4,500 (d) 800

(f) 900 Accounts Payable

(g) 3,400 (f) 900 (c) 900

Common Stock

(a) 25,600

Services Revenue

Supplies (e) 4,500

(c) 900

Selling Expenses

(d) 800

Prepaid Insurance

(b) 4,800

Equipment

(a) 7,600

(g) 3,400

1. The company paid \(4,800 cash in advance for prepaid insurance coverage.

2. D. Belle created a new business and invested \)6,000 cash, \(7,600 of equipment, and \)12,000 in web servers in exchange for common stock.

3. The company purchased \(900 of supplies on account.

4. The company received \)4,500 cash for services provided.

5. The company paid \(900 cash toward accounts payable.

6. The company paid \)3,400 cash for equipment.

7. The company paid $800 cash for selling expenses.

Short answer

Answer

Total of journal matches at $40,900

Step-by-step solution

Journal Entry

Journal entry is the process of recording transactions at the very beginning as soon as the transaction takes place.

Posting Journal Entry

Transaction.	Description	Debit	Credit
1.(b)	Prepaid Insurance	$4,800
	Cash		$4,800
	Being amount paid for prepaid insurance
2. (a)	Cash	$6,000
	Equipment	$7,600
	Web Services	$12,000
	Common Stock		$25,600
	Being common stock brought in the form of cash, equipment, and web services
3. (c)	Supplies	$900
	Cash		$900
	Being supplies bought in
4. (e)	Cash	$4,500
	Service revenues		$4,500
	Being services provided for cash
5. (f)	Accounts Payable	$900
	Cash		$900
	Being accounts payable paid off
6. (g)	Equipment	$3,400
	Cash		$3,400
	Being equipment purchased for cash
7. (d)	Selling Expenses	$800
	Cash		$800
	Being selling expenses paid off
	Total	$40,900	$40,900