80.2K

Verified Solution

Link Copied!

Jim Horton is updating his bookkeeping records at the end of the month. He has four transactions to enter in the general journal, but he is not sure how to analyze the transactions in order to complete the entries. Use the chart of accounts on the inside cover of the textbook or the handout and provide your analysis and create a general journal for the transactions listed below.

Transaction #1: On March 1st Jim Horton purchased a new computer for $1500. Jim paid $500 cash and put the remainder on his credit card.

Transaction #2: On March 30 Jim Horton obtained a grant for $750 from the Ontario government for small businesses. He will invest this money in his firm.

Transaction #3: On April 22 Jim Horton purchased office furniture worth $1000 on a store credit with zero dollars down. Interest will accrue after 90 days.

Transaction #4: On April 30 Jim Horton purchased a printer. He paid $100 by cheque for the machine.

ASSIGNMENT STEPS

1. Review each of the transactions carefully.
2. Following the example below, complete the analysis and journal entry for all the transactions.

   Jim Horton is updating his bookkeeping records at the end of the month. He has four transactions to enter in the general journal, but he is not sure how to analyze the transactions in order to complete the entries. Use the chart of accounts on the inside cover of the textbook or the handout and provide your analysis and create a general journal for the transactions listed below.

   Transaction #1: On March 1st Jim Horton purchased a new computer for $1500. Jim paid $500 cash and put the remainder on his credit card.

   Transaction #2: On March 30 Jim Horton obtained a grant for $750 from the Ontario government for small businesses. He will invest this money in his firm.

   Transaction #3: On April 22 Jim Horton purchased office furniture worth $1000 on a store credit with zero dollars down. Interest will accrue after 90 days.

   Transaction #4: On April 30 Jim Horton purchased a printer. He paid $100 by cheque for the machine.

   ASSIGNMENT STEPS

3. Review each of the transactions carefully.
4. Following the example below, complete the analysis and journal entry for all the transactions.

Analysis of Transaction Result The firm received advertising Step 1: What did the firm give and what did the firm receive in this transaction? The firm gave a cheque as payment for the advertising Step 2: Which account is used for the item received and which account is used for the item given? Advertising expense is used to record the costs of advertising The general account is used to record the payment Step 3: What category of account is it? Advertising expense is an expense account General bank account is an asset account Step 4: Will the account increase or decrease because of the transaction? Advertising expense account will increase General bank account will decrease Advertising expense account will be debited $550 Step 5 Will the account be debited (DEAD) or credited (CLIC)? By what amount? General bank account will be credited $550 Step 6: is the entry balanced? Yes, there is a debit and a credit of $550

Answer & Explanation Solved by verified expert

See Answer