Recording Journal Entries Blaine Air Transport Service, Inc., has been in operat

Question

Recording Journal Entries Blaine Air Transport Service, Inc., has been in operation for three years. The following transactions occurred in February: February 1 Paid $275 for rent of hangar space in February. February 2 Purchased fuel costing $490 on account for the next flight to Dallas. February 4 Received customer payment of $820 to ship several items to Philadelphia next month. February 7 Flew cargo from Denver to Dallas; the customer paid $910 for the air transport. February 10 Paid $175 for an advertisement in the local paper to run on February 19. February 14 Paid pilot $2,300 in wages for flying in January (recorded as expense in January). February 18 Flew cargo for two customers from Dallas to Albuquerque for $3,800; one customer paid $1,600 cash and the other asked to be billed. February 25 Purchased on account $2,550 in spare parts for the planes. February 27 Declared a $200 cash dividend to be paid in March. Required: Prepare journal entries for each transaction. Be sure to categorize each account as an asset (A), liability (L), stockholders

Explanation / Answer

February 1 Paid $275 for rent of hangar space in February. 2/1 Rent (Expense) A/C Dr 275 Cash (Asset) A/C Cr 275 February 2 Purchased fuel costing $490 on account for the next flight to Dallas. 2/2 Fuel A/C (Expense) Dr 490 Acct Payable (L) Cr490 February 4 Received customer payment of $820 to ship several items to Philadelphia next month. 4/2 Cash (A) Dr 820 SHipment a/c (R) Cr 820 February 7 Flew cargo from Denver to Dallas; the customer paid $910 for the air transport. 7/2 Cash (A) Dr 910 Ticket (R) A/C Cr 910 February 10 Paid $175 for an advertisement in the local paper to run on February 19. 10/2 Advt (E) Dr 175 Cash (A) Cr 175 February 14 Paid pilot $2,300 in wages for flying in January (recorded as expense in January). 14/2 Wages payable (L) Dr 2300 Cash (A) Cr 2300 February 18 Flew cargo for two customers from Dallas to Albuquerque for $3,800; one customer paid $1,600 cash and the other asked to be billed. 18/2 Cash (A) Dr 1600 Acct Rxable (A) Dr 2200 Tcket (R) Cr 3800 February 25 Purchased on account $2,550 in spare parts for the planes. 25/2 Spares A/C (E) Dr 2550 Acct Payable (L) Cr 2550 February 27 Declared a $200 cash dividend to be paid in March. 27/2 Retained Earnings (SE) Dr 200 Dividend Payable (L) Cr 200

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