Question

At the beginning of April, Bernadette Grechus launched a custom computer solutions company called Softworks. The company had the following transactions during April.

a. Bernadette Grechus invested \(65,000 cash, office equipment with a value of \)5,750, and \(30,000 of computer equipment in the company in exchange for common stock.

b. The company purchased land worth \)22,000 for an office by paying \(5,000 cash and signing a longterm note payable for \)17,000.

c. The company purchased a portable building with \(34,500 cash and moved it onto the land acquired in b.

d. The company paid \)5,000 cash for the premium on a two-year insurance policy.

e. The company provided services to a client and immediately collected \(4,600 cash.

f. The company purchased \)4,500 of additional computer equipment by paying \(800 cash and signing a long-term note payable for \)3,700.

g. The company completed \(4,250 of services for a client. This amount is to be received within 30 days.

h. The company purchased \)950 of additional office equipment on credit.

i. The company completed client services for \(10,200 on credit.

j. The company received a bill for rent of a computer testing device that was used on a recently completed job. The \)580 rent cost must be paid within 30 days.

k. The company collected \(5,100 cash in partial payment from the client described in transaction i.

l. The company paid \)1,800 cash for wages to an assistant.

m. The company paid \(950 cash to settle the payable created in transaction h.

n. The company paid \)608 cash for minor maintenance of the company’s computer equipment.

o. The company paid \(6,230 cash in dividends.

p. The company paid \)1,800 cash for wages to an assistant.

q. The company paid $750 cash for advertisements on the web during April.

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 $204,568.

Step-by-step solution

Journal Entry (part 1)

General Journal
Page 1
Date	Description	PR	Debit	Credit
a	Cash	101	$ 65,000
	Office Equipment	163	5,750
	Computer Equipment	164	30,000
	Common Stock	307		$ 100,750
	Being investment made into the business in the form of cash and equipment
b	Land	172	22,000
	Cash	101		5,000
	Notes Payable	250		17,000
	Being land purchased against cash and notes payable
c	Building	170	34,500
	Cash	101		34,500
	Being building purchased for cash
d	Prepaid Insurance	108	5,000
	Cash	101		5,000
	Being insurance premium purchased for 24 months
e	Cash	101	4,600
	Fees Earned	402		4,600
	Being services provided and payment received
f	Computer Equipment	164	4,500
	Cash	101		800
	Notes Payable	250		3,700
	Being drafting equipment purchased against cash and notes payable
	Carried Forward		$ 171,350	$ 171,350

Journal Entry (part 2)

General Journal
Page 2
Date	Description	PR	Debit	Credit
	Brought Forward		$ 171,350	$ 171,350
g	Accounts Receivables	106	4,250
	Fees Earned	402		4,250
	Being Services provided and amount due
h	Office Equipment	163	950
	Accounts Payable	201		950
	Being equipment purchased on credit
i.	Accounts Receivables	106	10,200
	Fees Earned	402		10,200
	Being services provided on credit
j	Computer Rental Expense	602	580
	Accounts Payable	201		580
	Being due to be paid
k	Cash	101	5,100
	Accounts Receivables	106		5,100
	Being amount collected from the client
l	Wages Expense	601	1,800
	Cash	101		1,800
	Being wages expenses paid
m	Accounts Payable	201	950
	Cash	101		950
	Being account settled for equipment purchased
n	Repair Expense	604	608
	Cash	101		608
o	Dividends	319	6,230
	Cash	101		6,230
	Being dividend paid
	Carried Forward		$ 202,018	$ 202,018

Journal Entry (part 3)

General Journal
Page 3
Date	Description	PR	Debit	Credit
	Brought Forward		$ 202,018	$ 202,018
p	Wages Expense	601	1,800
	Cash	101		1,800
	Being wages expense paid
q	Advertising Expense	603	750
	Cash	101		750
	Being advertisement expenses paid
	Total		$ 204,568	$ 204,568