JOURNAL ENTRY
JOURNAL ENTRY
STUDY PROBLEM 1-12
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FINANCIAL TRANSACTIONS
- Invested $200,000 to start JHJ rental car company
- Paid cash of $10,000 for supplies
- Paid cash of $24,000 for two year insurance policy
- Purchased equipment on account in the amount of $10,000
- Purchased $15,000 in supplies on account
- Paid advertising expense of $10,000
- Purchased ten autos for $30,000 each paying $50,000 down and signed a note for the balance
- Received cash car rental revenue $400,000
- Paid office salaries of $80,000
- Paid rent expense of $40,000
- Car rental revenue earned from corporate customers on account $100,000
- Paid on accounts payable $20,000
- Collection of cash from corporate customers $100,000
- Invested an additional $100,000 in the business
- Received cash car rental revenue $500,000
- Paid sales salaries of $300,000
- Car rental revenue earned from corporate customers $50.000
- Collection of cash from corporate customers
- Paid rent expense of $40,000
- Paid delivery expenses of $4,000
- Paid dividends of $5,000
- Purchased supplies on account $20,000
- Purchased supplies paying cash of $5,000
- Paid principal on note payable $40,000
- Paid interest expense on note payable $4,000
- Cash car rental revenue received $75,000
- Car rental revenue billed to corporate customers $125,000
- Collections from corporate customers $125,000
- Paid advertising expense $12,000
- Paid miscellaneous office expenses $2,000
- Invested additional $50,000 in the business
- Paid dividends of $10,000
- Purchased land for $200,000 paying $50,000 down and signed a note for balance
- Paid principal on note payable $50,000
- Paid interest on note payable $5,000
- Received cash care rental income of $150,000
- Billed corporate customers for car rental $250,000
- Collected car rental income from corporate customers $100,000
- Paid dividends $20,000
- Purchased supplies on account $15,000
- Ending supplies inventory $20,000
- Bad debt expense 1% of credit sales
- Dwight Howard paid $20,000 in advance to rent cars for friends for the NBA All Star Game
- Depreciation expense on equipment is calculated utilizing straight-line method and five year life
- Depreciation expense on autos is calculated utilizing the double declining balance method and a five year life
- Record expiration of one year’s insurance premiums
- Accrued salaries at end of year totaled $12,000
- Dwight Howard was provided cars for all-star game
REQUIRED:
- PREPARE JOURNAL ENTRIES AND POST ALL ENTRIES TO LEDGER
CHART OF ACCOUNTS
BALANCE SHEET ACCOUNTS INCOME STATEMENT ACCOUNTS
| 100 ASSETS | 400 REVENUES |
| 110 Cash | 410 Sales |
| 112 Accounts Receivable | 411 Sales Returns and Allowances |
| 113 Allowance for Doubtful Accounts | 412 Sales Discounts |
| 114 Inventory | |
| 116 Supplies | 500 COST AND EXPENSES |
| 117 Prepaid Insurance | 510 Cost of Merchandise Sold |
| 120 Land | 520 Sales Salaries Expense |
| 123 Auto | 521 Advertising Expense |
| 124 Accumulated Depreciation on auto | 522 Depreciation Expense on equipment |
| 125 Equipment | 523 Delivery expense |
| 126 Accumulated depreciation on equipment | 524 Bad Debt Expense
529 Miscellaneous selling expense |
| 200 LIABILITIES | 530 Office salaries expense |
| 210 Accounts Payable | 531 Rent Expense |
| 211 Salaries Payable | 532 Depreciation Expense on auto |
| 212 Unearned income | 533 Insurance expense |
| 215 Notes Payable | 534 Office supplies expense |
| 300 STOCKHOLDR’S EQUITY | 539 Misc. Administrative Expense |
| 310 Capital Stock | 600 Other Income |
| 311 Retained Earnings | 610 Rent Revenue |
| 312 Dividends | 700 Other Expense |
| 313 Income Summary | 710 Interest Expense |
