Question

E3-1 (L02) (Transaction Analysis—Service Company) Beverly Crusher is a licensed CPA. During the first month of operations
of her business (a sole proprietorship), the following events and transactions occurred.

April 2 Invested $32,000 cash and equipment valued at $14,000 in the business.
2 Hired an administrative assistant at a salary of $290 per week payable monthly.
3 Purchased supplies on account $700. (Debit an asset account.)
7 Paid offi ce rent of $600 for the month.
11 Completed a tax assignment and billed client $1,100 for services rendered. (Use Service Revenue account.)
12 Received $3,200 advance on a management consulting engagement.
17 Received cash of $2,300 for services completed for Ferengi Co.
21 Paid insurance expense $110.
30 Paid administrative assistant $1,160 for the month.
30 A count of supplies indicated that $120 of supplies had been used.
30 Purchased a new computer for $6,100 with personal funds. (The computer will be used exclusively for business purposes.)

Instructions
Journalize the transactions in the general journal. (Omit explanations.)

Answer 1

Answer

Date		Dr. $	Cr. $
April 2	Cash	32,000
	Equipment	14,000
	Owner Capital		46,000
2	No Entry for hiring
3	Supplies	700
	Accounts Payable		700
7	Rent	600
	Cash		600
11	Accounts Receivable	1,100
	Service Revenue		1,100
12	Cash	3,200
	Unearned Revenue		3,200
17	Cash	2,300
	Service Revenue		2,300
21	Insurance Expense	110
	Cash		110
30	Salary expense	1,160
	Cash		1,160
30	Supplies Expense	120
	Supplies		120
30	Equipment	6,100
	Owner Capital		6,100