Question

Prepare Journal Entries in a Revenue Journal

Horizon Consulting Company had the following transactions during the month of October:

Oct. 2.	Issued Invoice No. 321 to Pryor Corp. for services rendered on account, $450.
Oct. 3.	Issued Invoice No. 322 to Armor Inc. for services rendered on account, $630.
Oct. 14.	Issued Invoice No. 323 to Pryor Corp. for services rendered on account, $230.
Oct. 24.	Issued Invoice No. 324 to Rose Co. for services rendered on account, $940.
Oct. 29.	Collected Invoice No. 321 from Pryor Corp.

a. Record the October revenue transactions for Horizon Consulting Company in the following revenue journal format:

1. REVENUE JOURNAL
   DATE	Invoice No.	Account Debited	Post. Ref.	Accounts Rec. Dr. Fees Earned Cr.
   Oct. 2
   Oct. 3
   Oct. 14
   Oct. 24
   Oct. 31

   b. What is the total amount posted to the accounts receivable and fees earned accounts from the revenue journal for October?

   Accounts receivable	$
   Fees earned	$

   c. What is the October 31 balance of the Pryor Corp. customer account assuming a zero balance on October 1?
   $

Answer 1

Solution:

1.)

Revenue journal:

Date	Invoice No.	Account debited	Post Ref.	Accounts Rec.Dr. Fees Earned Cr.
Oct. 2	321	Pryor Corp.		$450
Oct. 3	322	Armor Inc.		$630
Oct. 14	323	Pryor Corp.		$230
Oct. 24	324	Rose Co.		$940
Oct. 31				$2,250

b.)

Account Receivable	$2,250
Fees earned	$2,250

Explanation:

$2,250	Debit to Account receivable [from revenue journal column total in (a)]
$2,250	Credit to Fees earned [from revenue journal column total in(a)]

c.)

$230($0 + $450 + $230 - $450)

Explanation:

Beginning balance of the Pryor Corp.	0
According to invoice no. 321	$450
Add: According to invoice no. 323	$230
Less: collected invoice no. 321from Pryor Corp. on October 29	$450
Then, the October 31, balance of the Pryor Corp.is	$230