Clean Home Inc. completed the following during April 2016, its first month of op
ID: 2491167 • Letter: C
Question
Clean Home Inc. completed the following during April 2016, its first month of operation. Assume that company makes adjustments at the end of every month. Record these transactions in general journal.
April 1 Purchased office equipment in the amount of $40.000 by singning a one-year note with a stated interest rateof 6% per year. The interest and principal of the note will be paid on the maturity date( 4/1/2017)
April 2 Prepaid $3600 cash for four-month advertisement (from 4/1/2016 to 7/31/2016)
April 8 Provided home cleaning services of $15,600 on account.
April 13 Received $ 9,300 cash in advance for cleaning services to be performed in future.
April 17 Purchased $2,780 of cleaning supplies on account.
April 22 Collected $11,200 cash from accounts receivable.
April 30 Accrued unpaid April salaries of $7,600.
April 30 Counted supplies and determined that $ 420 of supplies (purchased on April 17) remains on hand at the end of April . Adjusted for supplies expense.
April 30 Adjusted for April advertising expense (see April 2).
April 30 Accrued April interest on the note (see April1).
Explanation / Answer
1- purchase debit 40000
credit 6% one year note 40000
2- prepaid advertisement debit 3600
credit cash 3600
3- bills recivables debit 15600
credit home cleaning services 15600
4- cash debit 9300
credit unearned cleaning service charges in advance 9300
5-cleaning supplies debit 2780
credit bills payable 2780
6-cash debit 11200
credit bills receivables 11200
7-salaries debit 7600
credit unpaid wages payable 7600
8-income summary debit 2360
credit supplies expense 2360
9-advertising expenses debit 900
credit prepaid advettisement 900
10- interest on note debit 200
credit accrued interest on notes 200
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.