Question

Question:Karla Tanner opened a web consulting business called Linkworks and completed the following transactions in its first month of operations.

Apr. 1 Tanner invested \(80,000 cash along with office equipment valued at \)26,000 in the company in exchange for common stock.

2 The company prepaid \(9,000 cash for 12 months’ rent for office space. (Hint:Debit Prepaid Rent for \)9,000.)

3 The company made credit purchases for \(8,000 in office equipment and \)3,600 in office supplies. Payment is due within 10 days.

6 The company completed services for a client and immediately received \(4,000 cash.

9 The company completed a \)6,000 project for a client, who must pay within 30 days.

13 The company paid \(11,600 cash to settle the account payable created on April 3.

19 The company paid \)2,400 cash for the premium on a 12-month insurance policy. (Hint:Debit Prepaid Insurance for \(2,400.)

22 The company received \)4,400 cash as partial payment for the work completed on April 9.

25 The company completed work for another client for \(2,890 on credit.

28 The company paid \)5,500 cash in dividends.

29 The company purchased \(600 of additional office supplies on credit.

30 The company paid \)435 cash for this month’s utility bill.

Required

1. Prepare general journal entries to record these transactions (use account titles listed in part 2).

Short answer

The total of general journal matches at $164,425.

Step-by-step solution

Journal Entry (part 1)

General Journal
Page 1
Date	Description	PR	Debit	Credit
Apr 1	Cash	101	$ 80,000
	Office Equipment	163	26,000
	Common Stock	307		$ 106,000
	Being investment made into the business in the form of cash and equipment
Apr 2	Prepaid Rent	131	9,000
	Cash	101		9,000
	Being rent paid in advance
Apr 3	Office Equipment	163	8,000
	Office Supplies	124	3,600
	Accounts Payable	201		11,600
	Being office equipment and supplies purchased on credit
Apr 6	Cash	101	4,000
	Service Revenue	403		4,000
	Being cash received for providing services
Apr 9	Accounts Receivables	106	6,000
	Service Revenues	403		6,000
	Being services provided and payment due to receive
Apr 13	Accounts Payable	201	11,600
	Cash	101		11,600
	Being cash paid to creditors
	Carried Forward		$ 148,200	$ 148,200

Journal Entry (part 1)

General Journal
Page 2
Date	Description	PR	Debit	Credit
	Brought Forward		$ 148,200	$ 148,200
Apr 19	Prepaid Insurance	128	2,400
	Cash	101		2,400
	Being insurance premium paid for 12 months
Apr 22	Cash	101	4,400
	Accounts Receivables	106		4,400
	Being amount received from receivables
Apr 25	Accounts Receivables	106	2,890
	Service Revenues	403		2,890
	Being services provided on credit
Apr 28	Dividends	319	5,500
	Cash	101		5,500
	Being dividend paid
Apr 29	Office supplies	124	600
	Accounts payable	201		600
	Being supplies purchased on credit
Apr 30	Utility Expense	690	435
	Cash	101		435
	Being utility expenses paid
	Total		$ 164,425	$ 164,425