7. Prepare the journal entries for the following transactions duringSeptember 20

Question

7. Prepare the journal entries for the following transactions duringSeptember 2017:

a.     Sept. 3. ABC Corporation received $15,000 for services i twill provide in October.

b.     Sept. 4. ABC Corporation pays $12,000 for advertisingexpense.

c.      Sept. 5. ABC Corporation provides services and bills the customer for $18,000.

d.     Sept. 12. ABC Corporation buys $100,000 in equipment for $30,000 in cash and a long-term note payable of $70,000.

a.___________________________________________________________________________________________________________________________________________b.___________________________________________________________________________________________________________________________________________c.___________________________________________________________________________________________________________________________________________d.___________________________________________________________________________________________________________________________________________

______________________________________________________________________

Explanation / Answer

the following are the required journal entries:

transaction account description debit credit a.sept 3 Cash a/c $15,000 .......To unearned revenue $15,000 (unearned revenue credited since the services are to be provided in october) b.sept 4 advertising expense a/c $12,000 ........To cash a/c $12,000 (since advertising expenses are paid in cash) c.sept 5 Accounts receivable a/c $18,000 .........To service revenue a/c $18,000 (accounts receivable is debited since service provided to customer but amount not yet received in cash) d.sept 12 equipment a/c $100,000 To cash a/c $30,000 To Long term note payable a/c $70,000 (long term note credited for $70,000 upon purchase of machine for $100,000 and paying $30,000 cash)

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