Question

you are an accountant of Rapid Transport Service. The following information is available about the entity’s business transactions in June 2019.

June	1	Owner invested $50,000 in the business
	5	Purchased equipment for $6,000, paid $2,000 in cash and agreed to pay the rest in 30 days
	7	Paid office rent for the next six months 10,000
	12	Sent an invoice to a client for the service provided 2,500
	14	Received an advance payment of $8,000 from a client for the service will be provided in next 3 months

Required:
Prepare general journal entries for Rapid Transport Service. Ignore GST.
You may wish to copy the table below when answering this question

Answer 1

Required journal entries are given below:

Date	General Journal	Debit	Credit
June 1	Cash	$50000
	Contributed capital		$50000
	(for capital invested in the business)
June 5	Equipment	$6000
	Cash		$2000
	Accounts payable - Equipment		$4000
	(for equipment purchased)
June 7	Prepaid rent	$10000
	Cash		$10000
	(for 6 months rent paid)
June 12	Accounts receivable	$2500
	Service revenue		$2500
	(for service revenue)
June 14	Cash	$8000
	Unearned income		$8000
	(for advance payment received)