Journalize these transactions:
Apr 1: K. Smart (owner of business) provided delivery service to D. Smith for $1200. D. Smith agreed to pay in 30 days
Apr 2: D. Smith paid $400 on his account.
April 14: D. Smith paid the balance owing on his account
May 1: K.Smart provided delivery service for The Home Department Store,$700. Payment due in 30 days.
To journalize these transactions, you need to record them in a journal entry format. Each entry should include the date, a description of the transaction, and the debit and credit amounts. Here's how you can journalize the given transactions:
Apr 1:
Date: April 1
Description: Accounts Receivable - D. Smith (debit) / Service Revenue (credit)
Amounts: Debit - $1,200 / Credit - $1,200
Apr 2:
Date: April 2
Description: Cash (debit) / Accounts Receivable - D. Smith (credit)
Amounts: Debit - $400 / Credit - $400
April 14:
Date: April 14
Description: Cash (debit) / Accounts Receivable - D. Smith (credit)
Amounts: Debit - Balance owing on the account / Credit - Balance owing on the account
May 1:
Date: May 1
Description: Accounts Receivable - The Home Department Store (debit) / Service Revenue (credit)
Amounts: Debit - $700 / Credit - $700
In the April 1 entry, you are recording the service provided to D. Smith and the corresponding revenue generated. Since D. Smith agreed to pay in 30 days, you debit the amount to the Accounts Receivable of D. Smith. The credit is recorded under Service Revenue to acknowledge the revenue earned.
In the April 2 entry, you record the payment made by D. Smith. Since cash is received, you debit the Cash account and credit the Accounts Receivable of D. Smith.
In the April 14 entry, you record the remaining balance payment made by D. Smith. Again, you debit the Cash account and credit the Accounts Receivable of D. Smith, but the amounts will depend on the remaining balance owed.
In the May 1 entry, you record the delivery service provided to The Home Department Store and the corresponding revenue generated. Since payment is due in 30 days, you debit the amount to the Accounts Receivable of The Home Department Store, and the credit is recorded under Service Revenue to acknowledge the revenue earned.