Earhart Air Transport Service, Inc. has been in operation for three years. The f
ID: 2559712 • Letter: E
Question
Earhart Air Transport Service, Inc. has been in operation for three years. The following transactions occurred in July:
July 1 Paid $415 for rent of hangar space in July.
July 2 Purchased fuel costing $550 on account for the next flight to Boston.
July 4 Received customer payment of $910 to ship several items to New York next month
July 7 Flew cargo from Sacramento to Boston; the customer paid $1,110 for the air transport.
July 10 Paid $225 for an advertisement in the local paper to run on July 19.
July 14 Paid pilot $3,400 in wages for flying in June (recorded as expense in June).
July 18 Flew cargo for two customers from Boston to Phoenix for $4,200; one customer paid $2,000 cash and the other asked to be billed.
July 25 Purchased on account $3,250 in spare parts for the planes.
July 27 Declared a $300 cash dividend to be paid in August.
Required:
Prepare journal entries for each transaction. Be sure to categorize each account as an asset (A), liability (L), stockholders’ equity (SE), revenue (R), or expense (E).
Explanation / Answer
Journal entry :
Date accounts & explanation debit credit July 1 Rent expenses 415 Cash a/c 415 (To record rent paid) July 2 Fuel expenses a/c 550 Accured expenses payable a/c 550 (To record fuel expenses) July 4 Cash a/c 910 Unearned revenue 910 (To record advance income) July 7 no entry July 10 Advertisement expenses a/c 225 Cash a/c 225 (To record advertisement exp) July 14 Wages payable a/c 3400 Cash a/c 3400 (To record wages paid) July 18 Cash a/c 2000 Account receivable a/c 2200 service revenue a/c 4200 (To record revenue) July 25 Spare parts a/c 3250 Account payable a/c 3250 (To record spare parts) July 27 Dividend a/c 300 Dividend payable a/c 300 (To record dividend payable)Related Questions
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