Question

Thompson’s Contracting completed the following transactions during the month of September of the current year. Prepare journal entries for the above transactions in proper form with explanations of each transaction.

Sept 2 Made a $3,200 mortgage payment to the bank. Of this amount, $1,520 was for interest and $1,680 was for principal reduction.

Sept 4 Purchased Office Supplies for $1,700 on account.

Sept 6 Purchased a delivery vehicle for $35,600, paying cash of $5,900 and signing a note payable for the remainder.

Sept 12 Completed $4,750 of work for a customer. The customer paid $500 cash with the balance owing on account.

Sept 21 Paid for office supplies purchased on September 4.

Sept 23 Received payment of $1,500 in advance for work to be performed next month. Sept 27 Received payment in full for work completed on September 6.

Answer 1

journal entries in the book of thompson the month of septemper of the current year

sep 2 mortgage a/c Dr $1680

interest a/c    Dr $1520

To bank a/c $3200

(payment made towards mortgage and its interst)

sep 4 office supplies a/c Dr $1700

To account payable a/c $1700

(office supplies is purchased)

sep 6 delivery vehicle a/c Dr $35600

To cash a/c $5900

To bank a/c $29700

(purchased a delivery vehicle by paying cash and note payable)

sep 12 cash a/c Dr $500

debtors a/c Dr $4250

To service revenue $4750

(completed work for customer)

sep 21 account paable a/c Dr $1700

To bank a/c $1700

(paid for office supplies purchased earlier)

sep 23 bank a/c Dr $1500

To creditors a/c $1500

( advance pament recevied for work to be done)