Journalize the following transactions and omit the explanations.
A. ABC Corporation purchased $15,000 of office furniture by putting $7,000 down in cash and the rest on account on
April 8.
B. The corporation paid $60,000 for a two-year lease on April 19.
C. The corporation had sales of $45,000, of which $35,000 were on account on April 20.
D. The corporation borrowed $25,000 by signing a note payable on April 22.
E. The corporation paid $1,250 on one of its accounts payable on April 26.
The corporation borrowed $25,000 by signing a note payable on April 22.
how to journalize
To properly record the transactions in journal form, you'll need to follow the common format used in accounting. Each transaction will be recorded separately, using the appropriate accounts and amounts.
A. To journalize the purchase of office furniture:
Date: April 8
Account Debit Credit
Office Furniture 15,000
Accounts Payable 8,000
Cash 7,000
Explanation: In this transaction, ABC Corporation purchased office furniture. The Office Furniture account is debited with $15,000, representing the increase in the company's assets. The Accounts Payable account is debited with $8,000, reflecting the amount of the purchase still owed. Finally, the Cash account is credited with $7,000, indicating the cash paid upfront.
B. To journalize the lease payment:
Date: April 19
Account Debit Credit
Prepaid Lease 60,000
Cash 60,000
Explanation: The Prepaid Lease account is debited with $60,000, reflecting the payment made in advance for the two-year lease. The Cash account is credited with $60,000, representing the cash outflow for this transaction.
C. To journalize the sales:
Date: April 20
Account Debit Credit
Accounts Receivable 35,000
Sales Revenue 45,000
Explanation: This transaction records the sales made by ABC Corporation. The Accounts Receivable account is debited with $35,000, representing the amount of the sales made on credit (accounts receivable). The Sales Revenue account is credited with $45,000, reflecting the total amount of sales generated.
D. To journalize the borrowing:
Date: April 22
Account Debit Credit
Cash 25,000
Notes Payable 25,000
Explanation: The Cash account is debited with $25,000, reflecting the increase in cash resulting from the loan proceeds. The Notes Payable account is credited with $25,000, indicating the borrowing of funds through signing the note payable.
E. To journalize the payment on an account payable:
Date: April 26
Account Debit Credit
Accounts Payable 1,250
Cash 1,250
Explanation: This transaction relates to the payment made on an accounts payable. The Accounts Payable account is debited with $1,250, representing the decrease in the amount owed. The Cash account is credited with $1,250, reflecting the cash used to make the payment.
By following the above explanations and using the provided format, you can properly journalize the given transactions.