Question

Question: Journalizing transactions, posting journal entries to T-accounts, and preparing a trial balance

Vince York practices medicine under the business title Vince York, M.D. During July, the medical practice completed the following transactions:

Jul. 1 York contributed \(63,000 cash to the business in exchange for common stock.

5 Paid monthly rent on medical equipment, \)510.

9 Paid \(23,000 cash to purchase land to be used in operations.

10 Purchased office supplies on account, \)1,600.

19 Borrowed \(22,000 from the bank for business use.

22 Paid \)1,100 on account.

28 The business received a bill for advertising in the daily newspaper to be paid in August, \(240.

31 Revenues earned during the month included \)6,400 cash and \(6,000 on account.

31 Paid employees’ salaries \)2,200, office rent \(1,900, and utilities \)560. Record as a compound entry.

31 The business received \(1,120 for medical screening services to be performed next month.

31 Paid cash dividends of \)7,200.

The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Land; Accounts Payable; Advertising Payable; Unearned Revenue; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense; and Advertising Expense.

Requirements 1. Journalize each transaction. Explanations are not required

Short answer

Rent expense is the cost of using others’ property and the required journal entries are passed in step 2.

Step-by-step solution

Step-by-Step SolutionStep 1: Definition of Rent Expense

The rent expense is defined as the cost incurred by the company for using the property owned by some other party.

Journal Entries Passed

	Journal entry
Date	Particulars	Debit ($)	Credit ($)
July
1	Cash	$63,000
	Common Stock		$63,000
5	Rent expense	$510
	Cash		$510
9	Land	$23,000
	Cash		$23,000
10	Office Supplies	$1,600
	Accounts Payables		$1,600
19	Cash	$22,000
	Bank Loan		$22,000
22	Accounts Payable	$1,100
	Cash		$1,100
28	Advertising Expense	$240
	Accounts Payable		$240
31	Cash	$6,400
	Accounts Receivables	$6,000
	Service Revenue		$12,400
31	Salaries Expense	$2,200
	Rent Expense	$1,900
	Utilities Expense	$560
	Cash		$$4,660
31	Cash	$1,120
	Unearned Revenue		$1,120
31	Dividends	$7,200
	Cash		$7,200