Recording Transactions Using the Debit/Credit Paradigm. Miller and Co. experienc
ID: 2464429 • Letter: R
Question
Recording Transactions Using the Debit/Credit Paradigm.
Miller and Co. experienced the following six events in its first year of operations:
1. Shareholders contributed $60,000 cash.
2. Purchased land for $40,000 cash.
3. Borrowed $18,000 in cash from a bank.
4. Provided services for $16,000 which will be paid to Miller & Co. next year
5. Paid $11,000 cash for miscellaneous operating expenses.
6. Paid a $1,000 cash dividend to shareholders.
Required: Prepare journal entries using the debit/credit paradigm to record the above transactions. Thank you.
Explanation / Answer
1)
Dr. Cash A/c $60,000
Cr. Common Stock A/c $60,000
2)
Dr. Land A/c $40,000
Cr. Cash A/c $40,000
3)
Dr. Cash A/c $18,000
Cr. Bank loan A/c $18,000
4)
Dr. Acoounts Receivable A/c $16,000
Cr. Service revenue A/c $16,000
5)
Dr. Miscellaneous operating expenses Ac $11,000
Cr. Cash A/c $11,000
6)
Dr Dividend (or Retained Earnings)A/c $1,000
Cr. Cash A/c $1,000
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