1 Jessica Pothier opened FunFlatables on June 1. The company rents out moon walk
ID: 2477078 • Letter: 1
Question
1 Jessica Pothier opened FunFlatables on June 1. The company rents out moon walks and inflatable slides for parties and corporate events. The company also has obtained the use of an abandoned ice rink located in a local shopping mall, where its rental products are displayed and available for casual hourly rental by mall patrons. The following transactions occurred during the first month of operations.
1. Jessica contributed $50,000 cash to the company on June 1 in exchange for its common stock.
2. Purchased inflatable rides and inflation equipment on June 2, paying $20,100 cash.
3. Received $7,100 cash from casual hourly rentals at the mall on June 3.
4. Rented rides and equipment to customers for $13,150. Received cash of $4,450 on June 4 and the rest is due from customers.
5. Received $4,700 from a large corporate customer on June 5 as a deposit on a party booking for July 4.
6. Began to prepare for the July 4 party by purchasing various party supplies on June 6 on account for $1,350.
7. On June 7, paid $8,200 in cash for renting the mall space this month.
8. On June 8, prepaid next month’s mall space rental charge of $8,200.
9. Received $2,100 on June 9 from customers on accounts receivable.
10. Paid $1,250 for running a television ad on June 10.
11. Paid $4,250 in wages to employees on June 30 for work done during the month.
Required: 1. Prepare the journal entry for each of the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) •
Jessica contributed $50,000 cash to the company on June 1 in exchange for its common stock. Record the transaction. •
Purchased inflatable rides and inflation equipment on June 2, paying $20,100 cash. Record the transaction. •
Received $7,100 cash from casual hourly rentals at the mall on June 3. Record the transaction. •
Rented rides and equipment to customers for $13,150. Received cash of $4,450 on June 4 and the rest is due from customers. Record the transaction. •
Received $4,700 from a large corporate customer on June 5 as a deposit on a party booking for July 4. Record the transaction. •
Began to prepare for the July 4 party by purchasing various party supplies on June 6 on account for $1,350. Record the transaction. •
On June 7, paid $8,200 in cash for renting the mall space this month. Record the transaction. •
On June 8, prepaid next month’s mall space rental charge of $8,200. Record the transaction. •
Received $2,100 on June 9 from customers on accounts receivable. Record the transaction. •
Paid $1,250 for running a television ad on June 10. Record the transaction •
Paid $4,250 in wages to employees on June 30 for work done during the month. Record the transaction.
Explanation / Answer
The journal entries of Jessica Pothier for the transactions made during the first month of operation is as under: 1st June Cash $ 50,000 Common stock $ 50,000 (Being cash contributed for common stock) 2nd June Rides and Inflation Equipment $ 20,100 Cash $ 20,100 (Being Rideds and Inflation Equipment purchased) 3rd June Cash $ 7,100 Service revenue $ 7,100 (being casual hourly rentals at mall received in cash) 4th June Cash $ 4,450 Accounts receivable $ 8,700 Service revenue $ 13,150 (Being rent receivable recorded and rent in cash received recorded) 5th June Cash $ 4,700 Unearned revenue $ 4,700 (Being deposit from large customer received) 6th June Supplies $ 1,350 Accounts Receivables $ 1,350 (Being supplies purchaed on account) 7th June Rent $ 8,200 Cash $ 8,200 (Being rent paid in cash for renting the mall) 8th June Prepaid Rent $ 8,200 Rent expense $ 8,200 (Being prepaid rent paid for next month) 9th June Cash $ 2,100 Accounts Receivables $ 2,100 (Being cash received from accounts receivables) 10th June Advertisement expense $ 1,250 Cash $ 1,250 (Being cash paid for running TV ad) 11th June Wages $ 4,250 Cash $ 4,250 (Being wages to employees paid for the month of June)
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