Question

Required: Prepare the general journal entries to record the following transactions for Harry’s Catering in August 2020. Narrations are required. August 2020 5 Harry provided service of $650 to a customer. The customer paid $300 using a gift card purchased in 2019. The remaining balance was paid using cash. 12 Harry purchased an equipment for $4,500. He paid 30% of the price in cash and a bank loan is arranged for the remaining balance. 18 Harry purchased supplies of $450 on credit. 25 Harry paid $1,000 wages to staff. The expense was recorded in 2019. 28 Harry paid the annual insurance fee of $1,200 for the next 12 months.

Answer 1

Date	General journal	debit	credit
2020
Aug 5	Cash	350
	Unearned revenue	300
	Service revenue		650
	(Services provided against gift cards and cash)
Aug 12	equipment	4,500
	Cash		1,350
	Bank loan payable		3,150
	(Equipment purchased by cash and bank loan)
Aug 18	Supplies	450
	Account payable		450
	( Supplies purchased on account)
Aug 25	Salaries & wages payable	1,000
	Cash		1,000
	( Salaries paid to staff for prior period)
Aug 28	prepaid insurance	1,200
	Cash		1,200
	(Insurance expenses paid for 12 months)