Following are the transactions of Sustain Company.
June 1 T. James, owner, invested $14,500 cash in Sustain Co. in exchange for its common stock.
2 The company purchased $7,500 of furniture made from reclaimed wood on credit.
3 The company paid $1,300 cash for a 12-month insurance policy on the reclaimed furniture
4 The company billed a customer $6,500 in fees earned from preparing a SASB-compliant sustainability report.
12 The company paid $7,500 cash toward the payable from the June 2 furniture purchase. 20 The company collected $6,500 cash for fees billed on June 4.
21 The company received $13,500 cash from a sustainable investor group in exchange for common stock.
30 The company received $8,500 cash from a client for sustainability services for the next 3 months.
Prepare general journal entries for the above transactions View transaction list Journal entry worksheet 123 4 5 678 T.
James, owner, invested $14,500 cash in Sustain Co. in exchange for its common stock. Note: Enter debits before credits. Date General Journal Debit Credit June 01

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andromache andromache · Answer 1 · 2020-10-11T19:03:19+02:00

Answer and Explanation:

The Journal entries are shown below:-

1. Cash Dr, $14,500

To Common stock $14,500

(Being Common Stock issued is recorded)

2. Furniture Dr, $7,500

To Accounts Payable $7,500

(Being Furniture purchased on Credit is recorded)

3. Prepaid insurance Dr, $1,300

To Cash $1,300

(Being Prepaid Insurance Paid is recorded)

4. Accounts Receivable Dr, $6,500

To Service Revenue $6,500

(Being Revenue earned is recorded)

5. Accounts Payable Dr, $7,500

To Cash $7,500

(Being paid for Outstanding balance in payable is recorded)

6. Cash Dr, $6,500

To Accounts Receivable $6,500

(Being received from Accounts Receivables is recorded)

7. Cash Dr, $13,500

To Common stock $13,500

(Being common Stock issued is recorded)

8. Cash Dr, $8,500

To Unearned Service Revenue $8,500

(Being advance received for services is recorded)

Adjusting entries on month-end

Insurance Expense Dr, $108.33 ($1,300 ÷ 12)

To Prepaid Insurance $108.33

(Being insurance expired is recorded)