Question

3- Iris Smith has a salon. During the first month of the operation of her business, the following events and transactions occurred.

1- April 1 Invested $50,000 cash in her business.

2- Hired an assistant at a salary of $900 per week payable monthly.

3- Paid office rent for the month $1,500.

4- Purchased supplies on account from Zera Company $5,000.

5- Performed services and received in cash $6,300.

6- Received $500 cash advance from Moora as a deposit.

7- April 30 she paid the assistance the salary for the month $3,900.

8- April 30 she paid $5,000 to Zera Company for accounts payable due.

Iris uses the following accounts: Cash, Supplies, Accounts Payable, Unearned Service Revenue, Owner’s Capital, Service Revenue, Salaries and Wages Expense, and, Rent Expense.

Answer 1

1. April-1

Cash a/c $50,000

To owner's capital a/c $50,000

(For investment in business)

2. Salaries and wages expense $3,900

To salary payable $3,900

(For salary becomes due)

3. Rent expense $1,500

To Cash $1,500

(For rent paid)

4. Supplies $5,000

To Accounts payable (zera company) $5,000

(Purchased supplies from zera company on account)

5. Cash $6,300

To Service revenue $6,300

(For performing service)

6. Cash $500

To unearned service revenue $500

(Received deposit from moora )

7.April-30

Salary payable $3,900

To Cash 3,900

(Salary paid to assistant)

8. April-30

Accounts payable (zera company) $5,000

To Cash $5,000

(Balance Paid to zera company)