Question

Question:Prepare general journal entries for the following transactions of a new company called Pose-for-Pics. Use the following (partial) chart of accounts: Cash; Office Supplies; Prepaid Insurance; Photography Equipment; Common Stock; Photography Fees Earned; and Utilities Expense.

Aug. 1 Madison Harris, the owner, invested \(6,500 cash and \)33,500 of

photography equipment in the company in exchange for common stock.

2 The company paid \(2,100 cash for an insurance policy covering the

next 24 months.

5 The company purchased office supplies for \)880 cash.

20 The company received \(3,331 cash in photography fees earned.

31 The company paid \)675 cash for August utilities.

Short answer

Answer

Total of journal matches at $46,986.

Step-by-step solution

Journal Entry

Posting a transaction the moment it takes place is called journal entry. It records transactions chronologically in the original book of entry.

Posting Journal entries

Date	Description	Debit	Credit
Aug 1	Cash	$6,500
	Photocopy Equipment	$33,500
	Capital		$40,000
	Being cash and equipment invested into the business
Aug 2	Prepaid Insurance	$2,100
	Cash		$2,100
	Being insurance purchased for next 24 months
Aug 5	Office supplies	$880
	Cash		$880
	Being office supplies purchased
Aug 20	Cash	$3,331
	Photocopy Fees Earned		$3,331
	Being revenue earned
Aug 31	Utility Expense	$675
	Cash		$675
	Being utility expense paid
	Total	$46,986	$46,986