Answer to Question #313262 in Accounting for Hhh

Question

Brown Consulting Services organized as a corporation on January 18 and engaged in the following transactions during

its first two weeks of operation:

Jan. 18 Issued capital stock in exchange for $30,000 cash.

Jan. 22 Borrowed $20,000 from its bank by issuing a note payable.

Jan. 23 Paid $100 for a radio advertisement aired on January 24.

Jan. 25 Provided $1,000 of services to clients for cash.

Jan. 26 Provided $2,000 of services to clients on account.

Jan. 31 Collected $800 cash from clients for the services provided on January 26.

a. Record each of these transactions.

b. Determine the balance in the Cash account on January 31. Be certain to state whether the balance is debit or credit

Answer 1

Part a

Date  Description  Debit Credit

Jan-18 Cash           30,000

    Capital Stock            30,000

 

Jan-22 Cash           20,000    

Note payable            20,000        

Jan-23 Prepaid Radio

Advertisement Expenses  100    

Cash                  100    

Jan-25 Cash             1,000

    Service revenue             1,000

Jan-26 Accounts Receivable           2,000    

Service revenue              2,000        

Jan-31 Cash                 800

    Accounts receivable                 800

Part b

Cash Account

Date Description   Debit   Credit    Balance

Jan-18 Capital Stock          30,000        30,000

Jan-22 Note payable         20,000       50,000

Jan-23 Prepaid Radio Advertisement Expenses                 100      49,900

Jan-25 Service Revenue           1,000        50,900

Jan-31 Accounts receivable               800       51,700

Jan-31   Closing balance (Debit) 51,700